US stock markets have gained after data showed the economy lost fewer jobs in April than feared due to the coronavirus crisis, adding to optimism from an easing in friction between officials in Washington DC and Beijing.

All the 11 S&P sectors were trading higher, with the defensive real estate, utilities and consumer staples indexes posting some of the biggest gains.

Official figures showed non-farm payrolls plummeted 20.5 million in April – their steepest plunge since the Great Depression – but the number was still better than the 22 million forecast by economists polled by Reuters.

“There were whispers that the number could come in much worse,” said Darrell Cronk, chief investment officer at Wells Fargo Wealth & Investment Management in New York.

“The fact they didn’t come in higher is a bit of a relief rally. The market is exhaling a little bit on the fact that the worst jobs report in modern history wasn’t even worse.”

Wall Street’s indexes are now on course for their first weekly increase in three, with the Nasdaq recouping all its losses for 2020, as investors pinned their hopes on supply chains coming back on track and a revival in consumer spending after several US states reopened economies.

On Thursday, financial markets began pricing in a negative US interest rate environment for the first time ever, expecting the Federal Reserve to pump even more cash into the system to rescue the economy from a deep global recession.

Wall Street’s fear gauge slipped to its lowest since early March, consistently easing from levels last seen during the global financial crisis.

“The disconnect between sanguine financial markets and an imploding real economy grows larger by the day as bets for more and more stimulus are leading Wall Street to turn a blind eye to how catastrophic economic data really are,” said Marios Hadjikyriacos, investment analyst at online broker XM.

Also lifting the mood on Friday, Beijing representatives said China-US trade negotiators had agreed to improve the atmosphere for the implementation of a Phase 1 deal, days after President Donald Trump threatened to impose new tariffs.

In early trading, the Dow Jones Industrial Average was up 320.09 points, or 1.34 per cent, at 24,195.98, the S&P 500 was up 33.70 points, or 1.17 per cent, at 2,914.89. The Nasdaq Composite was up 84.69 points, or 0.94 per cent, at 9,064.35.

Financial stocks tracked a rise in Treasury yields, while energy stocks jumped on the back of higher oil prices.

Disney rose 2.3 per cent as tickets for the earliest days of Shanghai Disneyland’s re-opening in China sold out rapidly.

Uber Technologies Inc jumped 4.0 per cent as the company said its ride service bookings recovered in recent weeks and that it expects a coronavirus-related slowdown will delay the goal of becoming profitable by a matter of quarters, not years.

But Cognizant Technology Solutions Corp fell 3.5 per cent after the IT services and outsourcing firm warned of weak demand this year.

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