Wall Street rose higher ahead of US employment data on Friday that economists predict will deliver the strongest showing since August and a powerful indicator for the strong US economic recovery.

The S&P 500 closed the trading day up 0.8 per cent, hovering just below its high achieved late last month. The technology heavy Nasdaq Composite was up 0.4 per cent, reversing its four-session losing streak.

The S&P 500 had hovered around its Wednesday close for much of the day, while the Nasdaq had been as much as 1 per cent lower.

With the US economy close to recovering losses incurred during coronavirus shutdowns, economists expect Friday’s report to show that the economy added 1m jobs in April. Investors will scrutinise the non-farm payrolls report for clues about possible next moves by the Federal Reserve, which has said it would continue with its $120bn a month of bond purchases until the labour market recovers.

“There’s a lot of talk about, are we going to get a million and a half jobs on Friday,” said Nick Frelinghuysen, a portfolio manager at Chilton Trust. “The Fed has made it very clear that full employment is their mandate, but I think people are really concerned about when they’re going to start tapering.”

The 10-year Treasury yield, which moves inversely to the price of the note and was down slightly for most of the day, rose 0.05 percentage points by late in the afternoon, to 1.57 per cent.

Central bankers worldwide had a strong “communications challenge” around the eventual withdrawal of emergency monetary support measures, said Roger Lee, head of UK equity strategy at Investec.

“If it is orderly, then you can expect a gentle continuation of this year’s stock market rotation” from lockdown beneficiaries such as technology shares into economically sensitive businesses such as oil producers and banks, Lee said. “If it is disorderly, it will be a case of ‘sell what you can’.”

On Thursday the Bank of England upgraded its growth forecasts for the UK economy but stopped short of following Canada in scaling back its asset purchases.

The BoE maintained the size of its quantitative easing programme at £895bn, while also keeping its main interest rate on hold at a record low of 0.1 per cent. The British central bank added that while its asset purchases “could now be slowed somewhat” after it became the dominant buyer of UK government debt last year, “this operational decision should not be interpreted as a change in the stance of monetary policy”.

In Europe, the Stoxx 600 closed down 0.2 per cent, hovering just below its high reached in mid-April.

Sterling slipped 0.1 per cent against the dollar to $1.389.

The dollar, as measured against a basket of trading partners’ currencies, weakened 0.4 per cent. The euro gained 0.5 per cent to $1.206.

Brent crude fell 1 per cent to $68.24 a barrel.