Market Reaction to Jobs Report: Relief Rally Amid Uncertainty

Market reaction to jobs report as relief rally amid uncertainty. The latest U.S. jobs report showed 151,000 job additions, slightly below expectations, with the unemployment rate rising to 4.1%. Despite this, the market reaction has been relatively muted, sparking questions about why equities aren’t under more pressure. Experts Steve Sosnick (Interactive Brokers) and Joe Brusuelas break down the market’s response.

Stocks aren’t reacting negatively despite the miss because the report was still within an acceptable range for investors. After weeks of downward pressure, buyers are stepping in, seeing the dip as a buying opportunity. FOMO-driven rallies could push markets higher, particularly on Fridays due to weekly option expirations.

Wage growth remains stable, with average hourly earnings up 0.3% month-over-month. The labor market only needs to add 100,000–150,000 jobs per month to keep employment stable—this report hit that mark. Revisions for previous months were minor, indicating no major labor market shifts. Federal government payrolls fell by 10,000 jobs, partly contributing to the headline miss. Weather disruptions in Southern California and other regions may have impacted employment data.

Bigger Concern of the Market: Economic Slowdown vs. Fed Policy

Six weeks ago, markets expected only one rate cut in 2025, but now they’re pricing in three or more. Investors fear the economy may slow faster than the Fed reacts, increasing volatility. The U6 underemployment rate jumped to 8%, partly due to 1.3 million part-time workers unable to find full-time jobs. In the nutshell, traders should anticipate a positive turnout as time goes on.

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