Stocks traded in both positive and negative territory on Friday as investors weighed a flurry of news headlines, including better-than-expected jobs data and a Roaring Kitty livestream.
Ultimately, major stock indexes closed lower as people looked ahead to next week’s Fed meeting and key inflation updates.
Prior to the opening, Bureau of Labor Statistics The U.S. added 272,000 new jobs in May, beating economists’ expectations of the 180,000. The unemployment rate rose to 4.0% (3.96% not rounded) from 3.8% the previous month. Average hourly earnings, a proxy for inflation, rose 4.1% from a year ago.
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“For those concerned about inflation, and particularly those at the Federal Reserve, this report should raise concerns that wage pressures and inflation stickiness are not temporary and are likely to continue,” he said. Chris ZaccarelliChief Investment Officer at Independent Advisor Alliance.
surely, May employment report Treasury yields have soared, all but dashing hopes of a rate cut in July. FedWatchToolsFutures traders now estimate a 47% chance that the Fed will cut rates by 0.25 percentage point in September, down from 55% the previous day.
GameStop’s losses grow after Roaring Kitty live stream
Market participants’ attention immediately shifted from the state of the labor market to GameStop (GME), a meme stock, plummeted 39.4%.
GME shares had already fallen sharply ahead of Keith Gill’s lunchtime livestream on the video game retailer’s surprise earnings release and news of its new public offering. But GameStop, which was halted several times in intraday trading, fell further as Gill, also known as “Roaring Kitty,” held his first livestream since 2021.
During the event, which drew more than 500,000 viewers, Gill said he wasn’t working with any institutional investors and reiterated his support for GameStop CEO Ryan Cohen. He also told viewers that his comments should not be considered advice and that they should make their own investment decisions.
Samsara Falls Despite Beat-and-Raise Quarter
GameStop wasn’t the only stock to fall sharply on Friday. Reincarnation (IOT) shares fell 12.3% despite the Internet of Things solutions provider reporting. Better-than-expected first quarter results It also raised its full-year outlook.
William Blair analyst Dylan Becker (Outperform, equivalent to Buy) said the share price decline after the earnings announcement was likely the result of “overly high expectations and the company’s excessively high price-to-book multiple.” For comparison, IOT trades at 257 times forward earnings.
But over the long term, Becker believes Samsara’s “rare combination of rapid revenue growth and expanding margins will position it to outperform the market.”
Regarding the main indicators, Nasdaq Composite Index It fell 0.2% to 17,133. S&P 500 It fell 0.1% to 5,346. Dow Jones Industrial Average It fell 0.2% to 38,798.
Inflation data, Fed meeting scheduled
Next week Economic Calendar There’s a lot of potential stimulus for stocks, with the Consumer Price Index (CPI) for May due to be released on Wednesday morning, and the Fed’s latest policy statement later that afternoon.
The meeting will feature the release of the central bank’s dot plot, outlining how each member expects monetary policy going forward, as well as a press conference from Fed Chairman Jerome Powell that could offer hints about the timeline for any Fed rate cuts.
“Given there are only five meetings between now and the end of the year, I wouldn’t be surprised to see a slight change in the median, perhaps pushing one cut into 2025,” he said. Larry AdamChief Investment Officer of Raymond James’ Private Client Group.
There are also some tech companies worth noting. Revenue Calendarincluding Creative Cloud parent company Adobe (ADBE, +1.6%) and semiconductor manufacturers Broadcom (AVGO, +0.4%).
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