- U.S. stocks closed at record highs, driven by strong performance in the technology sector.
- The June jobs report added 206,000 jobs to the economy, slightly beating expectations.
- “The message to us is that the labor market is slowing,” Fundstrat’s Tom Lee said of the June jobs report.
U.S. stocks closed at a new record high on Friday after dovish June jobs data.
The technology sector led the gains, with the Nasdaq 100 up nearly 1% and the S&P 500 up about 0.5%.
Both indexes finished the week at all-time highs, but the Dow Jones Industrial Average has yet to reach its all-time high set in May.
The U.S. economy added 206,000 jobs in June, slightly more than the 200,000 economists had expected but below a downwardly revised May jobs report to 218,000 from 272,000.
April’s employment figures were also revised downward from the initial 165,000 to 108,000.
A revised jobs report and a rise in the unemployment rate to 4.1% from 4.0% in June sent bond yields plummeting and rekindled expectations of a rate cut from the Federal Reserve.
“June’s jobs report and its large (not unexpected) downward revision suggest it may be time for the Fed to cut rates,” Steven Blitz, economist at GlobalData TS Lombard, said in a Friday note.
“To us, the message is that the labor market is slowing,” Fundstrat’s Tom Lee said Friday. “Previously, the Fed has been reluctant to cut rates due to the perception that the labor market was strong despite soft inflation. This is probably becoming less and less the case given the softening of hiring.”
Market watchers believe the report makes the path to a September rate cut smoother and two cuts more likely. One cut in September and one in December looks like the likely bet for now, according to JPMorgan’s David Kelly, but investors should still be cautious about increasing their exposure to stocks with such high valuations.
Below are U.S. stock indexes as of the start of trading at 9:30 a.m. on Friday.
What else is happening today:
Nvidia shares received a rare downgrade from Wall Street on Friday due to concerns about its valuation.
Commodities, Bonds and Cryptocurrencies:
- West Texas Intermediate crude oil fell 0.88% to $83.14 a barrel, while the international benchmark Brent crude was down 0.89% to $86.65 a barrel.
- Gold rose 1.22% to $2,398.30 per ounce.
- The yield on the 10-year Treasury note fell 8 basis points to 4.28%.
- Bitcoin fell 1.04% to $56,449.
