The Dow Jones Industrial Average turned modestly higher early Friday, after opening in negative territory, and the technology-laden Nasdaq Composite rose, even as the April nonfarm payrolls report came in way below estimates, raising questions about the timing and pace of the labor-market rebound from COVID.

The weakness reflected in the jobs report may support some views that central bankers in the U.S. will keep monetary policy accommodative for an extended period.

How are stock benchmarks performing?
  • The Dow Jones Industrial Average
    was up 108 points to 34,658, a gain of 0.3%, establishing an intraday record high at 34,663.39.
  • The S&P 500 index
    added 21 points, or 0.5%, at 4,222. carving out its own intraday all-time high at 4,225.24.
  • The Nasdaq Composite Index
    gained 125 points to about 13,755. a gain of 0.9%,

On Thursday, the Dow
added 318.19 points to reach a record close of 34,548.53; a gain of 0.9%, the S&P 500
moved up 34.03 points, or 0.8%, at 4,201.62; while the Nasdaq Composite Index
traded up 50.42 points, or 0.4%, to 13,632.84, ending a streak of four straight losses.

What’s driving the market?

Markets may be interpreting bad news as good news on Friday.

The U.S. created 266,000 new jobs in April, on a seasonally adjusted basis, well below forecasts ranging from a gain of 755,000 to 1.25 million. The unemployment rate rose to 6.1% in April from 6%, even as average hourly wages rose 21 cents to $30.17.

On top of that, gains in March were lowered to 770,000 from 916,000, injecting at least some uncertainty into the pace of the rebound from COVID.

Some of the most bullish projections from Aneta Markowska and Thomas Simons at Jefferies LLC saw net job gains last month hitting 2.1 million, which would have marked the fastest growth since June of 2020.

The report, however, may bolster the view that the Federal Reserve will keep accommodative policies in place for a prolonged period, which had come into question in recent weeks on the back of evidence of a healthy rebound from the coronavirus outbreak.

“One thing is clear that the loose monetary policy isn’t going anywhere soon,” wrote
Naeem Aslam, chief market analyst at AvaTrade in a note after NFP.

Also speaking with Bloomberg TV after the Friday jobs report, Minneapolis Fed President Neel Kashkari said the surprise in the data shows the importance of basing monetary policy on outcomes, not forecasts.

“For all those people who have been saying ‘oh my gosh, the Fed needs to normalize quantitative easing,’ today’s job report is just an example of – we have a long way to go,” Kashkari said, in the interview.

The policy maker said he sees no shift in the central bank’s easy-money policy stance and anticipates that a jump in inflation will be transitory.

The 10-year Treasury note yield
briefly fell to around 1.50%, helping to create a runway for technology stocks that