Wall Street rallied again on Friday after a terrible, unprecedentedwasn't quite as horrific as economists had forecast.
The S&P 500 climbed 1.3% in midday trading after the government said employers cut a record-setting 20.5 million jobs last month. While the number is a nightmare, it was slightly below the 21 million that economists told markets to brace for. Investors are also increasingly betting they won't see another report that bad again because the number of workers filing for unemployment benefits has been slowly declining the last five weeks.
Stocks around the world were already heading higher before the U.S. jobs report came out, in part on hopes that U.S. and China won't restart their trade war. After the release of the report, stocks climbed even more. In another sign of receding pessimism, Treasury yields tentatively rose.
The Dow Jones Industrial Average was up 384 points, or 1.6%, at 24,260, as of 11:30 a.m. Eastern time. The Nasdaq was up 1.3%. The S&P 500 is heading toward its first winning week in the last three.
"The question that matters isn't whether the economy is at a standstill — it is," AllianceBernstein senior economist Eric Winograd wrote in a report. "What matters now is when and how the economy recovers, and today's data are largely backward-looking and therefore don't alter our fundamental view of the outlook."
After losing a third of its value in a little more than a month on worries about a severe recession, the S&P 500 has since charged higher to recover more than half its loss. The rally started after the Federal Reserve and Capitol Hill pledged trillions of dollars in aid to prop up the market and economy through the downturn.
More recently, even as horrific data confirmed, investors have pushed stocks higher as they looked ahead to growth potentially resuming later this year. Countries around the world and many U.S. states have laid out plans to relax restrictions on business, which could set the stage for many of those vanished jobs to reappear.
"This is a policy-induced downturn, and the speed and structure of the recovery could track a different path from previous recessions," Stephen Innes, chief global markets strategist at AxiCorp, said in a report. "The bounce-back will be much quicker."
Many analysts are skeptical of the rally, though, saying the economy likely won't recover nearly as vigorously and quickly as the stock market has. Friday's jobs report showed that the unemployment rate climbed to its highest level since the Great Depression. And if reopening economies lead to a renewed surge in infections, businesses shutdowns could sweep the world quickly again.