Investing.com - Stocks jumped for a third session Thursday in part because of news that the Trump Administration might hold back on imposing new tariffs on goods shipped into the United States from Mexico.
In addition, there was continued speculation the Federal Reserve might cut rates when it meets in mid-June.
The news on Mexico abruptly turned U.S. financial markets around. Crude oil moved higher, interest rates moved up slightly and so did most of the major sectors of the market.
The S&P 500 jumped 0.61%. The Nasdaq Composite added 0.53%, and the Dow jumped 0.71%. The Dow just missed its third-straight day of plus-200-point gains.
The strength of the rally has set the Dow and the S&P 500 up for their best weekly performances in 2019, with the Dow up 3.65% for the week after Thursday's close and the S&P 500 up 3.3%. The Nasdaq is up 2.2%. Its best week was the week of March 11, when it gained 3.78%.
But one aspect to Thursday's rally is worth watching.
The Dow Jones Transportation index fell 0.92%, with railroads the laggards. Kansas City Southern Railroad (NYSE:KSU) and Union Pacific (NYSE:UNP) are big players in the business of shipping goods north from Mexico. Kansas City Southern fell 1.64% and Union Pacific was off 1%.
Meanwhile, the Dow Jones Utility index hit a 52-week high as investors bet interest rates are headed lower. Investing.com's Fed Rate Monitor Tool sees little chance of a rate cut in June. But fed funds futures are pricing in a rate cut by July and almost certainly by September. The Fed's key federal fund rate is now 2.25% to 2.5%. Most bond yields are lower than that.
Financial markets have been driven in recent weeks by the reports or rumors of where U.S. trade policy is headed. The reports that the U.S. will delay tariffs on Mexico depend on whether Mexico can somehow curb illegal immigration into the U.S., the main point of contention, and whether President Donald Trump, traveling in Europe, will agree to the move. Late Thursday, Reuters tweeted the White House still plans to impose a 5% on Mexican shipments on Monday.
Friday's market will start with investor reaction to the May jobs report, due for release at 8:30 AM ET (12:30 GMT). Economists polled by Investing.com expect the Labor Department to show the unemployment rate holding steady at 3.6%. And estimates are that nonfarm payrolls, a key measure investors watch, will grow by 185,000, down from April's 263,000 job gains.
In the meantime, investors in big stocks were happy, especially with energy stocks. Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM) were among the top-performing Dow stocks as Crude oil WTI futures moved up 1.8% to $52.29. Brent oil ,the global benchmark, rose 1.72% to $61.67. Only a day earlier, Brent briefly fell below $60 for the first time since late January.
Apple (NASDAQ:AAPL) and Boeing (NYSE:BA), vulnerable to trade politics, also were higher and contributed about 32 points to the Dow''s gain.
Chipmaker Advanced Micro Devices (NASDAQ:AMD), Tesla (NASDAQ:TSLA) and NetEase (NASDAQ:NTES) led the Nasdaq 100 0.76% higher. The index is dominated by big tech stocks like Apple, Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN) and Google parent Alphabet (NASDAQ:GOOGL).
Winners and lowers among S&P 500 stocks
Advanced Micro Devices (NASDAQ:AMD), International Flavors & Fragrances (NYSE:IFF) and TechnipFMC (NYSE:FTI) were among the top S&P 500 performers on the day.
L Brands (NYSE:LB), Macerich (NYSE:MAC) and Range Resources (NYSE:RRC) were among the weakest S&P 500 performers on the day.