U.S. equities and stock exchange traded funds surged early Friday after a strong jobs report bolstered confidence in the economic outlook, but the earlier enthusiasm faded as traders speculated that the solid numbers could trigger even more rate hikes out of the Federal Reserve.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were flat Friday.
“There was an initial knee-jerk reaction to the upside and I think things are cooling down a little bit,” Myles Clouston, senior director at Nasdaq Advisory Services, told Reuters.
The equities market rallied in early trading after data showed 235,00 jobs added in public and private sectors in February, compared to economists’ expectations of 190,000.
The unemployment rate also dipped down to 4.7% from 4.8% as both workforce participation and employment rose, and average hourly earnings grew by 0.2%, according to the New York Times. The improved employment data helped drive the initial bump in equities.