Wall Street posts weekly gains, Treasury yields jump as upbeat jobs data ease economic fears

By Stephen Culp

NEW YORK (Reuters) -U.S. stocks closed sharply higher on Friday and U.S. Treasury yields jumped as a generally upbeat employment report and bounce-back in Tesla (NASDAQ:TSLA) shares helped the indexes notch weekly advances.

All three major U.S. stock indexes surged, while bitcoin jumped and crude prices settled at their highest level since mid-April.

"Stocks bounced back nicely today," said Ryan Detrick, chief market strategist at Carson Group in Omaha. "It’s a recent theme we’ve been seeing; the day after a red day has been pretty strong. That’s another clue that the bulls are in charge."

The U.S. economy added 139,000 jobs in May, topping analysts’ expectations, while the unemployment rate held firm at 4.2%, the Labor Department said. The report also showed hotter-than-anticipated wage growth, which is unlikely to convince the U.S. Federal Reserve to cut its key policy rate in the near term.

"The headline number was solid, but clearly there is some deterioration and slowing when you peel back the onion," Detrick added. "The reality, though, is the labor market is still growing and the overall economy is still on fairly firm footing. That led to the relief rally to close out a solid week."

Tesla stock rebounded 3.8% a day after a very public spat between U.S. President Donald Trump and his top advisor, billionaire Elon Musk, sent shares of Musk-helmed Tesla tumbling, which helped drag the indexes decisively lower.

The falling out between the erstwhile allies revived concerns over Trump’s "Big Beautiful Bill" of tax and spending plans and its effect on the growing deficit.

Tariff negotiations between the U.S. and its trading partners remain fluid, with the European Union and India working toward ironing out deals, and further U.S.-China talks promised after Trump’s phone call on Thursday with Chinese President Xi Jinping.

China has granted temporary export licenses to rare-earth suppliers of the top three U.S. automakers amid emerging supply chain snags due to Beijing’s export curbs on the materials. On the flip side, the United States has suspended licenses for nuclear equipment suppliers to sell to Chinese power plants, according to people familiar with the matter.

The Dow Jones Industrial Average rose 443.13 points, or 1.05%, to 42,762.87. The S&P 500 climbed 61.06 points, or 1.03%, to 6,000.36 and the Nasdaq Composite advanced 231.50 points, or 1.20%, to 19,529.95.

European shares followed their U.S. counterparts higher after the jobs report, notching their second consecutive weekly gains, buoyed by upbeat U.S. employment data and waning worries over trade disputes.

MSCI’s gauge of stocks across the globe rose 5.27 points, or 0.59%, to 892.10.

The pan-European STOXX 600 index rose 0.32%, while Europe’s broad FTSEurofirst 300 index rose 7.10 points, or 0.32%.

Emerging market stocks rose 0.12 points, or 0.01%, to 1,182.80. MSCI’s broadest index of Asia-Pacific shares outside Japan closed lower by 0.1%, to 622.63, while Japan’s Nikkei rose 187.12 points, or 0.50%, to 37,741.61.

The dollar rose against major currencies in the wake of the better-than-expected employment data.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.51% to 99.18, with the euro down 0.42% at $1.1396.

Against the Japanese yen, the dollar strengthened 0.87% to 144.77.

The report also prompted a rally in cryptocurrencies. Bitcoin gained 3.80% to $104,334.11. Ethereum rose 3.7% to $2,487.77.

U.S. Treasury yields also rode the wave of the upbeat jobs data.

The benchmark U.S. 10-year note yield rose 11.1 basis points to 4.506% from 4.395% late on Thursday.

The 30-year bond yield rose 8.2 basis points to 4.9655% from 4.884% late on Thursday.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 11.7 basis points to 4.041%, from 3.924% late on Thursday.

Crude prices registered their first weekly gain in three after Trump and Xi resumed trade talks, raising hopes of demand growth.

U.S. crude rose 1.91% to settle at $64.58 per barrel, while Brent settled at $66.47 per barrel, up 1.73% on the day.

Gold prices dipped in opposition to the strengthening greenback, as the jobs report clouded the outlook for rate cuts from the Federal Reserve.

Spot gold fell 1.27% to $3,310.58 an ounce. U.S. gold futures fell 1.23% to $3,309.50 an ounce.