Stock Market Continues to Rally After Solid Jobs Report

Published: May 2, 2025 by Omor IE

Key Points

A strong labor report has caused the market to get more optimistic.
There are also reports of China considering trade talks with the US.
That said, the Federal Reserve is now less likely to cut rates.
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The S&P 500 could be on its way to marking its ninth positive day after the recent jobs report lifted the stock market once more. Buying pressure due to cooling inflation data two days ago kept the stock market in positive territory despite GDP declining by 0.3%, and solid tech earnings the day after accelerated those gains.

Today, numbers came out that showed that unemployment has held steady and nonfarm payrolls have come in much higher than forecasts. In addition, there are also reports that China is currently considering trade talks with the US.

Here’s a market update as of 10:00 A.M (ET) today.

The S&P 500 is up 51.99 points, or 0.93%.
The Nasdaq Composite is up 158.98 points, or 0.89%.
The Dow Jones Industrial Average is up 358.59 points, or 0.88%.

Macros

Macro figures have been bullish for the market today.

Nonfarm payrolls came in at 177,000 vs. 138,000 expected. It is still down from 228,000 previously, but it has held up better than expected.
Unemployment rate held steady at 4.2%.
Hourly earnings grew 3.8% vs 3.9% expected.
Private payrolls came in at 167,000 vs. 125,000 expected.
Government payrolls came in at 10,000 and met the forecast.

Strong Jobs Report Makes a Fed Rate Cut Less Likely

The strong jobs report makes it less likely that the Federal Reserve will cut interest rates. The two top priorities of the Fed is maximum employment and price stability. As long as the labor market is solid, the Fed has less of a reason to cut, especially since the inflation rate is still above target and tariffs could cause a bump here soon.

According to The Wall Street Journal’s Nick Timiraos:

“The April jobs report makes a June rate cut less likely (even though that is a world away) because there will only be one more employment report before then.”

He also said that, “For now, it means the Fed doesn’t have to say anything on June at next week’s meeting.”

In the meantime, President Donald Trump has reiterated that the Fed should lower its rate. He posted on Truth Social the following:

“Gasoline just broke $1.98 a Gallon, the lowest in years, groceries (and eggs!) down, energy down, mortgage rates down, employment strong, and much more good news, as Billions of Dollars pour in from Tariffs. Just like I said, and we’re only in a transition stage, just getting started!!! Consumers have been waiting for years to see pricing come down. no inflation, the the Fed should lower its rate!!!”

De Minimis Ends Today

China has said that it is evaluating tariff talks with the US, and this has also sparked optimism. That said, these talks are yet to materialize, and triple-digit tariffs remain on both sides, with exemptions only for critical imports. It is almost equivalent to an embargo.

These tariffs are expected to hit lower-cost imports from China the hardest once the de minimis exemption ends. This means goods below $800 will be tariffed. These goods were previously not subject to tariffs.