John Hancock: Weekly Market Recap Week Ended May 3

Fed holds steady

As expected, the U.S. Federal Reserve kept its benchmark interest rate at the highest level in more than two decades as it again held off on any rate cuts. Fed officials acknowledged that they have recently seen “a lack of further progress” in bringing inflation closer to the Fed’s 2% long-term target rate. 

Jobs growth moderates

U.S. stock indexes climbed on Friday and bond yields fell after a jobs report eased concerns about labor market-induced inflationary pressures, potentially shifting the outlook for interest-rate cuts. In April, the economy generated 175,000 jobs, down from an upwardly revised 315,000 figure in March. Wages rose at a 3.9% annual rate versus 4.1% in March.

Earnings pick up

Profits at some of the biggest technology companies continued to improve as earnings season neared an end. FactSet reported on Friday that analysts were expecting S&P 500 companies overall to post a 5.0% first-quarter earnings increase compared with the same quarter a year earlier, based on results released so far and projections for companies that haven’t yet reported. Just a week earlier, the projected growth rate was 3.5%.

Sagging confidence

A measure that tracks monthly changes in U.S. consumer sentiment fell sharply to the lowest level since 2022. Many consumers surveyed for the Conference Board’s latest report cited concerns about inflation and the jobs outlook.