S&P 500 Posts Weekly Climb as April Jobs Top Expectations

The S&P 500 surged 2.86% during the first week of May 2025, fueled by a resilient April jobs report that exceeded market expectations. With nonfarm payrolls rising by 177,000 and unemployment holding steady at 4.2%, the data underscored the labor market’s endurance amid broader economic uncertainty. This positive momentum, coupled with easing trade tensions with China, propelled equities to their longest winning streak since 2004.

The S&P 500’s gains were anchored by the robust jobs data. Let’s break down the numbers:
- Weekly Return: The index rose from 5,528.75 on April 28 to 5,686.67 on May 2, a climb of 2.86%.
- Jobs Report: April’s nonfarm payrolls increased by 177,000, slightly below March’s revised 185,000 but above the 133,000 estimate. This marked the 14th consecutive month of job growth exceeding 100,000.

Sector Insights:
The healthcare sector led the way, adding 51,000 jobs—the largest gain since 2021—while transportation and warehousing added 29,000. Financial activities and social assistance also expanded, offsetting declines in manufacturing (-1,000) and federal government jobs (-9,000).

Despite the strong headline figures, nuances emerged. Average hourly earnings rose only 0.2% month-over-month, below the 0.3% forecast, and annual growth slowed to 3.8%. This moderation in wage growth eases near-term inflation fears but hints at softer consumer spending power.

Market Reaction:
Equities rallied immediately after the report, with the S&P 500 closing 1.5% higher and the Dow gaining 1.4%. Analysts highlighted the labor market’s “Goldilocks” scenario: strong enough to support corporate earnings but not so hot as to provoke aggressive Fed tightening.

Fed Policy Outlook:
The Federal Reserve is expected to maintain rates at its late April/May meeting, given the conflicting signals from the jobs report. While employment remains near record highs, downward revisions to prior months’ payrolls—March by 43,000 and February by 15,000—suggest underlying volatility. Markets now price in a 40% chance of a rate cut by year-end, up from 25% pre-report.

Conclusion:
The April jobs report and S&P 500’s performance reflect a market clinging to optimism amid mixed signals. The 177,000 jobs added, alongside the longest equity rally in decades, signal investor confidence in the labor market’s durability. However, the modest wage growth and sector-specific job losses remind us that resilience is not uniform.

For investors, the path forward hinges on two variables: whether earnings can grow alongside hiring and how the Fed navigates the data’s contradictions. With the S&P 500 now up 12% year-to-date, the focus shifts to corporate Q2 earnings and trade negotiations. Until then, the market’s climb remains justified—but not without risk.

As always, the numbers tell the story: a 2.86% weekly return, 177,000 jobs, and a 4.2% unemployment rate. For now, the bulls are in control.