- US stocks fell on Friday as investors digested the May jobs report.
- Strong employment data has reduced expectations that the Fed will cut interest rates later this year.
- “Today’s data undermines the message of a cooling U.S. economy that has been conveyed by other recent economic data.”
U.S. stocks closed slightly lower on Friday but ended the week up more than 1% after the May jobs report came in much better than expected.
The data showed that 272,000 jobs were added to the economy last month, well above economists’ expectations of about 180,000.
The report also showed the unemployment rate rose to 4.0% from 3.9%, suggesting weakness in the labor market offsetting the better-than-expected employment report.
Meanwhile, average hourly earnings rose to 4.1% annually from 3.9%, rekindling concerns about inflation and delaying a possible Fed interest rate cut from September to December.
According to the CME FedWatch tool, there is just a 47% chance that interest rates will be cut in September, down from a 55% probability prior to the release of the jobs report.
“Today’s data weakens the message of a cooling US economy that has been coming out of recent economic data and closes the door on a rate cut in July,” said Seema Shah, chief global strategist at Principal Asset Management. “We still expect the Fed to cut rates in September, but another data release like today’s could put an end to that possibility.”
As of the close of trading at 4pm on Friday, U.S. stock indexes were as follows:
Here’s something else that happened today:
Commodities, Bonds and Cryptocurrencies:
- West Texas Intermediate crude oil fell 0.34% to $75.29 a barrel, while the international benchmark Brent crude was down 0.60% to $79.39 a barrel.
- Gold fell 3.38% to $2,310.00 per ounce.
- The yield on the 10-year Treasury note rose 14 basis points to 4.43%.
- Bitcoin fell 2.20% to $69,216.
