Jobs Held Up. Oil Still Runs the Fed.

GOOD MORNING, Friday's jobs report made the U.S. economy look more resilient than markets expected. Payrolls rose by 178,000 in March, unemployment fell to 4.3% and the 10-year Treasury yield moved higher even with U.S. stocks closed for Good Friday. Normally, that would be enough to push the Fed debate toward stronger growth. This time, oil still matters more. WTI had just jumped more than 11% and Brent nearly 8% as Hormuz remained effectively closed, while weekend U.S. intelligence suggested Iran had little incentive to give up its strongest economic leverage. The labor market is holding up. The question is whether the energy shock lets the Fed care.

MARKETS | TLDR

March payrolls beat expectations by a wide margin: Nonfarm payrolls rose by 178,000 versus roughly 60,000 expected, while unemployment fell to 4.3%, reinforcing expectations that the Fed can remain patient.
Treasury yields rose even with U.S. equities closed: The 10-year yield climbed about 4 basis points to 4.35% after the jobs report as traders reduced the urgency around near-term rate cuts.
Oil entered the weekend above $100 after another violent move: WTI surged 11.4% Thursday to $111.54 and Brent rose 7.8% to $109.03 as the market priced prolonged disruption through the Strait of Hormuz.

FED SETUP

The Jobs Report Was Strong. The Fed Still Has an Oil Problem.

U.S. payrolls rose by 178,000 in March, nearly triple the consensus estimate of 60,000. The unemployment rate fell to 4.3%, while average hourly earnings rose just 0.2% on the month and 3.5% from a year earlier. The headline was strong enough to push Treasury yields higher and reduce the case for an imminent Fed cut.

That matters because the labor market is giving policymakers time. A weak jobs report would have forced the Fed to choose between deteriorating employment and rising energy-driven inflation. Instead, March suggests the economy can absorb some additional policy patience. Several analysts described the report as strong enough to keep the Fed on the sidelines while it waits to see how the Iran shock affects growth and inflation.

The caveat is that the report itself predates much of the economic damage from the war. Wage growth is already slowing, the labor force shrank again and February payrolls were revised down to a 133,000 decline. More importantly, gasoline and freight costs are only beginning to move through the economy. The Fed may have time — but oil is deciding how much of that time remains.

AI GOES PUBLIC

SpaceX Is Turning the AI Buildout Into a $1.75 Trillion IPO Test

SpaceX confidentially filed for a U.S. IPO that could value the combined SpaceX-xAI company at more than $1.75 trillion and raise more than $50 billion, potentially making it the largest public listing ever. The proposed valuation follows SpaceX's merger with xAI, which valued the rocket company at $1 trillion and the AI business at $250 billion.

That matters because SpaceX is no longer being valued purely as a launch and satellite company. Its story increasingly includes AI infrastructure, from xAI's model business to plans for data centers in orbit. If the IPO proceeds near the discussed valuation, public investors will be asked to price a company whose future depends on multiple capital-intensive markets that do not yet have mature economics.

The listing could therefore become a referendum on how far investors are willing to extend the AI valuation framework. Starlink provides real recurring revenue and strategic infrastructure, but orbital compute and broader AI ambitions require enormous capex. In a world where Treasury yields and energy costs are rising, the difference between visionary TAM and financeable cash flow becomes much more important.

HEADLINES

Iran is unlikely to reopen Hormuz quickly, U.S. intelligence says: U.S. assessments suggest Tehran sees control of the strait as its strongest remaining leverage, implying the energy shock may last longer than markets initially hoped.
Trump gives Iran another 48-hour deadline: The president threatened further escalation if Iran does not make a deal or reopen Hormuz, keeping oil exposed to another binary geopolitical move before markets reopen Monday.
The labor-force signal was weaker than the payroll headline: Nearly 1.5 million people had left the workforce over four months, complicating the drop in unemployment and suggesting the jobs market is healthier than February but not uniformly strong.
Wage growth slowed to its weakest pace in nearly five years: Average hourly earnings rose 3.5% year over year, a sign that labor inflation is cooling even as energy inflation accelerates.
OPEC+ can add barrels, but Hormuz decides whether they matter: Producers were considering another output increase, but much of that capacity cannot reach global buyers normally while the strait remains constrained.

UPCOMING

OPEC+ meeting — April 5: Any output increase will matter less than the ability to export through Hormuz, making shipping capacity more important than headline quotas.
Trump's Hormuz deadline — April 6: Markets reopen with another escalation deadline hanging over oil, inflation expectations and Treasury yields.
March CPI — April 10: The first major consumer-price report after the energy shock will show how much of the oil move has already reached gasoline and broader inflation.
TSMC March revenue — April 10: The monthly sales update will provide a high-frequency read on whether advanced-chip demand remains resilient despite the sharp rise in energy and macro volatility.

DEEP INSIGTHS

What March Jobs Really Said

Read this for the details beneath the 178,000 payroll gain. The report showed broad job creation and lower unemployment, but also a shrinking labor force and the weakest wage growth in nearly five years — a much more nuanced signal than the headline alone.

SpaceX's Potential $1.75 Trillion IPO

This is useful because it shows how the AI valuation trade is expanding beyond conventional software and semiconductors. SpaceX's merger with xAI and plans for orbital compute are embedding AI expectations directly into what could become the largest IPO ever.