SP500 Rallies At The Open As Non Farm Payrolls Exceed Expectations

Key Insights

• WTI oil rebounds above the $71 level as recession fears ease.
• SP500 tests resistance at 4115 as risk appetite grows. 
• U.S. Dollar Index is moving higher as Treasury yields rise.

On May 5, U.S. released Non Farm Payrolls report, which indicated that economy added 253,000 jobs in April. Unemployment Rate declined from 3.5% to 3.4%.

Treasury yields are moving higher as the job market stays strong. Oil markets showed a strong reaction to the better-than-expected U.S. jobs data, which was not surprising as oil traders were worried about a potential recession in the U.S. The strong jobs data shows that the U.S. economy remains in a decent shape despite the banking crisis. WTI oil moved above the $71 level, while Brent oil tested the $75 level.

SP500 rallied at the open as traders reacted to the Non Farm Payrolls data. Currently, SP500 is trying to settle above the 4115 level. In case this attempt is successful, SP500 will head towards the next resistance, which is located at the 4150 level.

U.S. Dollar Index has also moved higher. The better-than-expected jobs data allows the Fed to keep the interest rates at current levels for some time to put more pressure on inflation. U.S. Dollar Index managed to settle above the 101.50 level and tested the 20 EMA at 101.80. A move above the 20 EMA will push the U.S. Dollar Index towards the resistance at 102.00.

Strong dollar and rising Treasury yields put material pressure on gold markets, which suffered a strong sell-off. Gold has quickly moved from $2035 to $2005 as traders prepared for a more hawkish Fed.

For a look at all of today’s economic events, check out our economic calendar.