U.S. equities and stock exchange traded funds turned positive late Friday after investors pushed away from safe-haven assets in their initial knee-jerk reaction to President Donald Trump’s decision to strike a Syrian airfield.
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 up 0.2% Friday.
Investors initially turned to safe-haven assets on the increased political uncertainty in the wake of a U.S. precision strike against Syria as observers cautioned that the move could fuel tensions with Russia, which has backed Syrian President Bashar al-Assad.
Traders also reacted negatively to the lackluster jobs growth in the month of March after the Labor Department revealed nonfarm payrolls increased by a seasonally adjusted 98,000 in March, compared to economists’ projections of a 175,000 jump, the Wall Street Journal reports.
“This morning’s job numbers place another speed bump in front of the equity rally,” Chris Gaffney, president of world markets at EverBank, told Reuters. “These payroll numbers and the missile strike in Syria will give investors cause for concern.”
However, U.S. equities rebounded after traders began to digest the news, with some now arguing that the Syrian strike could revive Trump’s economic agenda as the military action has united both sides of Congress behind the president.
“Trump just won some badly-needed political capital,” analyst Greg Valliere of Horizon Investments wrote in a note to clients after the strike, according to Yahoo! Finance. “He finally has some bipartisan support, and if he can capitalize on it there could be a re-set for his entire presidency.”
Moreover, the strong action gives a signal to world leaders, especially China, as the U.S. president talks with his Chinese counterpart Xi Jinping in negotiations, notably talks over how to handle North Korea.
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