Bond Yields Rise After Strong March Jobs Report

 Treasury  yields climbed modestly after a  Labor Department  report showed the  U.S.  added a better-than-expected 178,000 jobs in March, signaling the economy continued pushing forward as a once-in-a-generation energy shock upset global markets.
The 10-year  Treasury  yield rose to 4.344% from 4.32% before the Friday report and 4.31% late Thursday. Stock futures ticked slightly lower after the report. Major indexes were closed for the  Good Friday  holiday.
Friday's reading found the unemployment rate slipped to 4.3% from 4.4% from a month earlier, when a widespread and unexpected decline in jobs clouded the outlook for a  Federal Reserve  now contending with a low-hire, low-fire labor market and persistent inflationary pressures. The loss in February payrolls was revised to 133,000 from 92,000 previously.

Futures on Friday were pricing in a 76% chance that the central bank will hold rates steady through year's end, according to CME FedWatch, little changed from Thursday but up significantly from a month ago.

"This report tells us next to nothing about the  Iran  war's impact on the job market,"  Comerica Bank  chief economist  Bill Adams  told clients. " The Fed  will hold rates steady for at least the next few decisions as they wait to understand the war's effects."
After the Dow Jones Industrial Average and S&P 500 in March posted their worst monthly declines since 2022, hope for a wind-down to the war in the coming weeks fueled a stock-market rally in recent days. All three major  U.S.  indexes finished the week up 3% or more.
"You would expect prices to go down as traders took profits and looked to reduce exposure over the long weekend, so the fact that they didn't is the dog that didn't bark," said  Chris Zaccarelli , chief investment officer for Northlight Asset Management. "We believe the (price) risk is to the upside."
But oil analysts warn that impacts are piling up from a 10-million-barrel-a-day supply disruption, while a buildup in both  U.S.  and Iranian forces suggests the war could be entering a perilous new phase. On Friday, American officials mounted a search-and-rescue operation for the two-person crew of a downed fighter jet before  Iran  could reach any potential survivors;  U.S.  officials confirmed one of the crew members had been rescued.
 Polymarket  bettors Friday morning put the chances that  U.S.  forces will enter  Iran  by  April 30  at 87%, up from 66% earlier in the day.  Polymarket  has a data partnership with  Dow Jones , the publisher of The Wall Street Journal.
Bettors also ramped up wagers Friday that  U.S.  oil prices will reach  $120  a barrel in April.  Polymarket  put the likelihood of those higher prices at 74% midday, up from 68% early Friday. On Thursday, benchmark  U.S.  crude futures jumped 11% to  $111.54  following an address by  President Trump  that provided little clarity on an exit strategy from  Iran  or a reopening of the  Strait of Hormuz .
Now, traders will wait until futures open Sunday night to see how crude prices -- the key variable across financial markets in recent weeks -- respond to the latest  U.S.  strikes on Iranian infrastructure and  Tehran's  counterattacks across the Persian Gulf.
Higher oil prices are the latest challenge for a  U.S.  economy that has overcome crosscurrents sweeping through trade, consumer behavior and government spending. Growth late last year was slower than initially thought. New business activity in March fell to an 11-month low by one measure. The hiring rate in February was at its lowest level since the depths of the pandemic.
That has left the stock market searching for direction after a torrid multiyear rally driven by artificial- intelligence mania has run headlong into the largest oil-supply disruption in history.
Investors expect the energy shock from the war with  Iran  will propel inflation higher and force some Americans to siphon spending from elsewhere. The highest oil prices since 2022 catapulted the average  U.S.  price for gasoline to  $ 4.09  Friday, according to  AAA , while diesel costs surged to  $5.53 .
Fallout from the war won't only boost the prices of jet fuel, petrochemicals, plastics, asphalt and other byproducts of oil. It is also "making the labor market more vulnerable," said  Nancy Vanden Houten , lead economist at  Oxford Economics . She added, however, that "any impact will take some time to materialize."