Stocks mixed after jobs report shows wages are rising at the fastest pace in nearly a decade

  • Stocks climbed Friday for a fourth day on the back of trade optimism.
  • The US added more jobs than expected in October, and wages rose at the fastest pace in nearly a decade.
  • Follow the US indexes in real time here.

Stocks were mixed Friday as the prospect of cooling trade tensions buoyed the mood on Wall Street, following the latest signs of a tightening labour market and expectations for rising rates.

The Dow Jones Industrial Average rose 0.5%, or more than 100 points. The Nasdaq Composite fell 0.5%, and the S&P 500 climbed 0.3%. Analysts are cautiously optimistic after President Donald Trump said Thursday that he plans to meet with Chinese leader Xi Jinping at a multilateral summit this month.

Earnings season continued with Apple posting a disappointing forecast for the holiday season Thursday evening. Starbucks posted its strongest sales in more than a year and topped revenue and profit estimates.

All eyes were on the US jobs report before the open, which showed hiring picked up more than expected in October. The Bureau of Labour Statistics said the economy added 250,000 jobs last month, compared with forecasts of 200,000, and unemployment remained at a decades-low rate of 3.7%. Wages rose at their fastest pace in nearly a decade, up 3.1% from a year ago.

Ian Sheperdson, chief economist at Pantheon Macroeconomics, said it’s clear the labour market is strong enough to anticipate another rate increase by the Federal Reserve this year. But he added the overshoot could have been partly related to workers returning from Hurricane Florence and Hurricane Michael.

“In one line: Solid across the board, though hard to read the trends behind the weather noise,” he said. “Nothing in this report will make the Fed think that skipping the Dec hike is a good idea.”

The dollar pared Thursday’s losses against a basket of currencies following the jobs report, heading back toward its highest level in more than a year. Investors ditched US government bonds, with yields on the 10-year Treasury note rising 3.4 basis points to 3.178%. Bond yields move inversely to prices.

Wall Street followed equity rallies around the world, with the Shanghai Composite jumping 2.7% to its highest level in three weeks. The pan-European Stoxx 600 rose 0.9%, putting it on track for its best week since 2016.