Major US stock indices experienced sharp declines, falling by approximately 5.5% to 6%. Additionally, crude oil settled at $61.99 after a challenging week.
The US jobs report for March showed a non-farm payroll increase of 228K, exceeding expectations of 135K. The unemployment rate rose to 4.2%, while the participation rate improved to 62.5%.
Private sector hiring increased by 209K, with the leisure and hospitality sector adding 43K jobs. Despite the positive employment data, financial markets displayed mixed reactions, with the US dollar showing slight increases against some currencies.
Us Debt Market Reactions
Yields in the US debt market fell initially but rebounded after the jobs report. By market close, the 2-year yield was at 3.678%, while 10-year yields reached 4.013%.
Prices for US stocks continued to drop, with the Dow down 2231.07 points, the S&P index falling 322.44 points, and the NASDAQ decreasing by 962.82 points.
Crude oil prices fell 12.19% during the week due to tariff news and anticipated slower global growth. OPEC+ announced an unanticipated increase in oil production by 411,000 barrels per day starting in May, contributing to the declining oil prices.
The figures above paint a fairly decisive picture. Job growth was stronger than expected, with non-farm payrolls showing a notable rise, especially in private hiring. Yet, even with rising participation in the labour force, the bump in the unemployment rate tempers the otherwise upbeat report. It’s a story of strength tinged with enough imperfection to keep broader sentiment in check. The market, judging by its movements, didn’t quite know how to digest it.
Broader Market Sentiments
Equity markets reacted harshly across the board. Falls of over 5% in the major indices point to more than skittishness—it suggests growing concern about tightening liquidity conditions or possible earnings revisions. The sharp drop wasn’t confined to technology or cyclical names—it was broader and lacked the kind of rotation that might hint at internal optimism. When we see everything moving lower without clear protection, that’s rarely driven by a single headline. It’s bigger than that.
Meanwhile, the treasury curve tells its own story. The sharp rebound in yields after the report implies that traders are still tying employment data to tightening odds, even if at reduced levels from earlier months. A move up in 10-year yields, past the psychological 4% mark again, is unlikely to go unnoticed by large allocators. Typically, that kind of reaction would be driven more by inflation expectations than growth—but in this case, we think it’s just as much about unwinding safe haven plays given the rebound in jobs.
Oil had its own steep collapse, owing in part to news around production increases. The size of the drop for energy commodities far outpaced what would be justified by demand alone. This points to positioning getting caught out—especially those managers who had built up long exposure expecting summer demand to lend support. Instead, the market was met with an unexpected move from producing nations, which forced a re-pricing almost overnight. The 12% move is one few models would have projected.
Here’s how we need to think about it now: volatility is back, and it’s not just concentrated in riskier parts of the market. Defensive sectors are not behaving obviously defensively. Cross-asset correlations are increasing, and that changes the playbook. The jobs data alone didn’t offer clean direction. What matters now is how risk takers respond to broader uncertainty with economic numbers that are resilient—but not predictable.
Traders must look well beyond fixed numbers. In the next fortnight, price action and implied volatility will act as more accurate reflections of sentiment than headlines. What matters is not the headline payroll figure, nor the OPEC production increase in isolation, but how participants across equity, credit and currency markets are adapting their exposures to these moves. Systematic strategies will be resetting thresholds. Options dealers will need to shift hedges, particularly into month-end. These kinds of flows tend to amplify whatever underlying moves are starting to appear organically.
We are seeing sharper intraday reversals, indicative of reduced conviction. That’s often a function of reduced liquidity as well—especially in pre-earnings periods when large institutions sit on their hands ahead of guidance. Domestic macro data is no longer being taken at face value. Instead, traders are weighing it against a backdrop of policy that is not yet fully priced. There is still uncertainty over the path for tightening—or even whether current levels hold.
The reaction in the US dollar was more tempered, but it’s the shift in real yields that deserves closer watching. If the 2-year finds support above recent lows while long-duration assets begin to underperform again, then risk-off flows could find renewed momentum. That would not only weigh on equities but also create pressure across baskets that have risen on carry trades.
We’re also watching for whether the stress in oil impacts broader inflation expectations, and whether that gets priced into breakevens over the coming sessions. Any detachment between commodity prices and inflation expectations would be short-lived. If expectations begin to fall, long-duration might catch a bid—but probably not for long if equities continue declining.
In sum, the pattern over recent sessions signals that institutional portfolios are shifting—not just for earnings, but in recognition of changing macro triggers. The next week of positioning changes will be telling. Risk-taking requires clarity, and at the moment, there’s precious little of it. We need to work with what the market gives, not what it promises.
