US stocks rose in a broad-based rally, while Treasury yields fell, as data dispelled fears of a supercharged labor market that would support a more aggressive policy path. The dollar index fell.
The S&P 500 posted its biggest one-day gain this month, albeit in light holiday trading, recouping all of the losses from the previous two days. The tech-heavy Nasdaq 100 outperformed, with Tesla rising more than 8% and tech titans such as Apple, Amazon , and Microsoft also outperforming. Asian technology stocks rose earlier today on signs that China is relaxing regulatory restrictions.
Treasury yields on 10-year notes fell six basis points, capping a week-long 20-basis-point increase that weighed on risk sentiment. The Dollar fell against all ten of its peers.
Investors found solace in us jobs data that failed to reveal unwelcome surprises while highlighting the labour market's resilience in the face of the Federal Reserve's aggressive monetary tightening. In the week ending December 24, initial unemployment claims increased slightly to 225,000, in line with expectations. Continuing claims increased to 1.7 million in the week ending December 17, the highest level since early February.
The rally is a ray of hope as a dismal year for stocks and bonds comes to a close. Global equities have lost a fifth of their value in 2022, the largest annual decline since 2008, with technology bearing the brunt of the selloff. A global bond index has fallen 16% as inflation remains sticky and interest rates rise.