The U.S. April non-farm payroll report beat expectations, leading the stock market to recoup its losses.

The April 2025 U.S. non-farm employment report indicated an addition of 177,000 jobs, exceeding the forecasted 130,000, while the unemployment rate held steady at 4.2%. These figures bolstered market confidence, lifting the three major U.S. stock indices, as the S&P 500 index marked its longest nine-day winning streak since 2004, wiping out the early April losses triggered by President Trump's tariff policies. Despite the risks posed by tariffs and an economic slowdown, the labor market's resilience has emerged as a crucial factor in the stock market's rebound.

Employment Data Exceeds Expectations, Labor Market Shows Resilience

According to data released by the U.S. Department of Labor on May 2, non-farm employment increased by 177,000 in April 2025, significantly higher than the market expectation of 130,000. Although slightly down from the revised 185,000 in March, it still indicates a robust job market. The unemployment rate remained at 4.2%, unchanged from the previous month, meeting market expectations.

Job growth was mainly concentrated in healthcare (+51,000), transportation and warehousing (+29,000), financial activities (+14,000), and social assistance (+8,000). Conversely, federal government employment decreased by 9,000, reflecting a continued trend of downsizing in the government sector.

In terms of average hourly earnings, there was a 0.2% increase month-over-month and a 3.8% increase year-over-year in April, slightly below the market expectations of a 0.3% monthly increase and a 3.9% annual increase, indicating moderate wage pressure, which helps alleviate inflation concerns.

Stock Market Strongly Rebounds, Major Indices Achieve Gains

Boosted by the employment data, all three major U.S. stock indices rose on May 2. The S&P 500 index increased by 82.53 points, or 1.47%, closing at 5,686.67 points, marking the longest winning streak of nine consecutive days since 2004. The Dow Jones Industrial Average rose by 564.47 points, or 1.39%, closing at 41,317.43 points. The Nasdaq Composite Index climbed by 266.99 points, or 1.51%, closing at 17,977.73 points.

This surge not only erased the losses since President Trump's announcement of the "Liberation Day" tariff policy in early April but also reflected a renewed confidence in the U.S. economic fundamentals. According to The Washington Post, the S&P 500 index has rebounded over 12% since April 2, successfully recovering all lost ground.

Technology and Finance Lead Gains, Energy and Healthcare Lag

In this rebound, technology stocks performed particularly well. Microsoft rose by 2.3%, and Nvidia increased by 2.5%, becoming the main drivers of the market's upward movement. Financial stocks also performed well, with JPMorgan Chase rising by 2.3% and Visa by 1.5%.

However, not all sectors recovered simultaneously. The energy sector is still down 13.4% from the beginning of April, making it the worst-performing sector. The healthcare and materials sectors have also not fully recovered, remaining 4% and 1.9% below their April 2 levels, respectively.

Bond Market Reaction: Yields Rise, Rate Cut Expectations Cool

The strong employment data also had a noticeable impact on the bond market. The yield on the U.S. 2-year Treasury note rose by 8 basis points to 3.78% intraday, while the 10-year Treasury yield increased to 4.31%. Market expectations for a near-term rate cut by the Federal Reserve (Fed) have cooled.

According to Fed fund futures prices, the market currently expects only about an 85 basis point rate cut for the entire year of 2025, down from 90 basis points before the report was released. Some investors are even betting on the possibility of no rate cuts for the year. BlackRock portfolio manager Rosenberg noted, "Unless the unemployment rate rises significantly, the Fed will not act easily."

Tariffs and Trade Situation Remain Potential Risks

Despite strong employment data, the market is still closely watching the direction of the Trump administration's tariff policies. On April 2, Trump announced "reciprocal tariffs" on most countries, causing dramatic market fluctuations. Although some tariff measures have been temporarily suspended for 90 days, tariffs as high as 145% on China remain in effect.

Recently, China has indicated that it is evaluating the U.S. proposal to restart trade negotiations, and the market holds hope for a possible easing of U.S.-China trade tensions. If negotiations go smoothly, it will help further stabilize market sentiment.

Mixed Performance of Individual Stocks, Apple and Amazon Under Pressure

Amid the overall market rise, some large tech stocks showed mixed performance. Apple's stock price fell by 3.7%, mainly due to an estimated $900 million increase in costs this quarter due to tariffs and a $10 billion reduction in its stock buyback plan. Amazon's stock price also fell slightly due to lowered profit expectations.

In contrast, Chinese stocks performed strongly. Alibaba (BABA) rose nearly 4%, while XPeng Motors (XPEV) and NIO saw gains of over 5%, reflecting market optimism about improving U.S.-China trade relations.

The U.S. April non-farm payroll report beat expectations, leading the stock market to recoup its losses.

Key Updates

All four major U.S. stock indices rose across the board on May 1: The S&P 500 achieved its longest streak of consecutive gains since 2004, boosted by employment data and trade talks.

Earnings reports from tech giants drive a rebound in US stocks, while Trump's tariff policy sparks inflation concerns.

U.S. stocks have risen for nine consecutive days: Strong non-farm payroll data and progress in U.S.-China trade talks boost the market's recovery

In 2025, the first-quarter decline in U.S. GDP triggered market volatility, but robust employment figures and strong tech earnings aided the rebound of U.S. stocks.

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