- CBOE Volatility Index drops 10% on Friday.
- Tech leads gains in major indices.
- Investors cheer the solid employment data.
After starting the day modestly higher on the back of upbeat nonfarm payroll report, major equity indexes extended their upside to end the week on a positive note.
The monthly report released by the U.S. Bureau of Labor Statistics on Friday showed that the total nonfarm payroll employment increased by 213,000 in June to beat the experts’ estimate of 195K. Despite that robust increase in payrolls, however, the average hourly earnings rose by 0.2% to fall short of the market consensus of 0.3% to the liking of investors.
“The market turned its frown upside down, and it’s been in the green ever since. This really is the best outcome we could have hoped for, more jobs without a whole lot of wage pressures,” Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh, told Reuters.
Although the trade fears continued to escalate with China and the United States kicking off tit-for-tat import tariffs worth of $34 billion USD on Friday, the CBOE Volatility Index, Wall Street’s fear gauge, fell nearly 11% to point out to a higher risk appetite.
Boosted by the improved market sentiment, the S&P 500 Information Technology Sector (SPLRCT) outperformed other major sectors to end the day 1.25% higher.
The Dow Jones Industrial Average added 94.83 points, or 0.39%, to 24,451.57, the S&P 500 rose 23.11 points, or 0.84%, to 2,759.72 and the tech-heavy Nasdaq Composite gained 101.96 points, or 1.34%, to 7,688.39. For the week, the indexes were up 0.7%, 1.5%, and 2.4% respectively.
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