Stocks, yields edge higher; Powell says economy still in good place

NEW YORK (Reuters) -Stock indexes rose on Friday after Federal Reserve Chair Jerome Powell said the U.S. economy continues to be in a good place and it remains to be seen if the Trump administration’s tariff plans will prove to be inflationary, while U.S. 10-year Treasury yields also turned higher.

Stocks and Treasury yields were lower earlier in the day after data showed the U.S. economy created fewer jobs than expected last month, adding to recent worries about economic growth. The jobs report pushed up market expectations for the amount of rate cuts from the Federal Reserve this year.

Nonfarm payrolls increased by 151,000 jobs in February, according to the closely watched employment report, with unemployment edging up. The report, the first under President Donald Trump’s watch, came at the end of a week marked by confusion over U.S. trade policy and a global rise in borrowing costs.

Powell spoke after a week in which Trump imposed and then delayed 25% tariffs on major trading partners Mexico and Canada, with the levies still slated to go into effect in early April and other tariffs on imports also possibly on their way.

The economy is holding up, “even with all the headlines and the noise that continue to hit the tape,” said Adam Sarhan, chief executive at 50 Park Investments in New York, adding that after recent sharp selling in stocks, “an oversold bounce is way overdue.”

The S&P 500 on Friday registered its biggest weekly percentage decline since September, while on Thursday, the Nasdaq confirmed a correction, defined as a fall of at least 10%, since peaking in December, as tariffs announced by Trump have fueled investor uncertainty.

Following the jobs data, traders added to expectations the central bank will lower borrowing costs in June, according to data compiled by LSEG.

“The market is back to pricing in three rate cuts in 2025,” said Brian Jacobsen, chief economist at Annex Wealth Management.

The yield on the benchmark U.S. 10-year Treasury note rose 3.8 basis points (bps) to 4.32%. For the week, the 10-year yield is up about 9 bps, on track to snap a five-week streak of declines.

A sharp sell-off in euro zone government bonds abated on Friday, after the biggest two-day fall in Bunds since the 1970s on the back of Germany’s plans to completely rewrite its fiscal rules.

Germany’s 10-year bond yield, the benchmark for the euro zone bloc, was down 5.5 bps at 2.83%.

The euro had its biggest weekly percentage gain against the U.S. dollar since 2009. It was last up 0.51% on the day at $1.0838. The dollar index was last down 0.32% at 103.86.

On Wall Street, the Dow Jones Industrial Average rose 222.64 points, or 0.52%, to 42,801.72, the S&P 500 gained 31.68 points, or 0.55%, to 5,770.20 and the Nasdaq Composite rose 126.97 points, or 0.70%, to 18,196.22.

MSCI’s gauge of stocks across the globe rose 1.72 points, or 0.20%, to 852.10. The pan-European STOXX 600 index ended down 0.5%.

The STOXX 600 was down 0.7% for the week, snapping a 10-session winning streak, its longest since early 2024.

Bitcoin fell 3.31% to $86,514.78. Trump signed an executive order to establish a strategic reserve of cryptocurrencies by using tokens already owned by the government, disappointing some in the market who had hoped for a firm plan to buy new tokens.

U.S. crude rose 68 cents to settle at $67.04 a barrel and Brent climbed 90 cents to settle at $70.36.

(Reporting by Caroline Valetkevitch; additional reporting by Tom Wilson in London and Chuck Mikolajczak in New York; Editing by Alex Richardson, Hugh Lawson, Chris Reese and Deepa Babington)