Stocks Surge Back as Powell Assures Economic Stability

(Bloomberg) — A roller-coaster week for markets concluded with a surprising twist, as stocks experienced significant fluctuations while traders navigated a barrage of headlines concerning the economy, tariffs, and geopolitical tensions. Just moments after a sharp decline that saw the S&P 500 drop over 1%, the index rebounded, marking an “oversold bounce” following Federal Reserve Chair Jerome Powell’s reassurance that the economy is stable. The Nasdaq 100 also moved away from the brink of a correction, while bond prices fell.

Geopolitical Developments Impacting Markets

In a potential sign of progress, Russia indicated a willingness to discuss a temporary ceasefire in Ukraine, responding to U.S. President Donald Trump’s call for peace. This development contributed to a tumultuous week for investors, with the dollar experiencing its worst performance since November 2022. Kenny Polcari from SlateStone Wealth remarked, “What I do know is that volatility seems like the only thing that is certain at the moment. Investors should ensure they understand that and are prepared for what that means. So, make sure you are well diversified for this ride.”

Market Reactions to Economic Data

This week has been a whirlwind for markets, particularly as tariffs reached a fever pitch, causing the S&P 500 to briefly dip below a critical technical level: its 200-day moving average. Although the index managed a late-day recovery, it still concluded the week with its most significant selloff since September. Wall Street remained vigilant, closely monitoring the latest economic indicators.

U.S. job growth showed signs of stabilization last month, yet the unemployment rate rose to 4.1%, presenting a mixed picture of the labor market. Nonfarm payrolls increased by 151,000 in February, following a downward revision of the previous month’s figures. Byron Anderson from Laffer Tengler Investments commented, “We are not putting much stock in the jobs report at the moment. Today’s data was mixed at best, but we still have no clarity on the economy moving forward. Markets, businesses, and consumers do not like uncertainty, which leads to increased volatility.”

Investors Remain Cautious Amid Policy Uncertainty

NEW YORK (Reuters) – A solid U.S. jobs report alleviated some concerns regarding a rapid economic slowdown. However, with policy uncertainty on the rise and tariff-related headlines clouding the outlook for risk assets, Wall Street found little to celebrate. The U.S. job growth in February fell just short of expectations, and the unemployment rate edged up to 4.1%. Investors had anticipated a more pessimistic outcome following a series of troubling data releases.

Despite the recent selloff in stocks, uncertainty surrounding trade policy and significant federal government spending cuts continues to loom, potentially undermining the labor market’s resilience in the coming months. Jack Ablin, chief investment officer at Cresset Capital in Chicago, stated, “We’ve got a relatively expensive market. Mix that with uncertainty and concern, and the path of least resistance is downward.”

Looking Ahead: What’s Next for the Markets?

Nonfarm payrolls rose by 151,000 jobs last month, following a downwardly revised increase of 125,000 in January, according to the Labor Department. Economists surveyed by Reuters had predicted a rise of 160,000 jobs. The employment report came on the heels of data indicating that U.S. economic growth may be slowing, raising questions about the sustainability of the current market rally.

As investors brace for potential shifts in economic policy and ongoing geopolitical tensions, the market’s future remains uncertain. For more insights on the latest market trends, visit the original article.