NEW YORK — U.S. stocks were rising to yet another record high on Friday as a long-awaited report on the job market bolstered Wall Street hopes that interest rates may soon be eased.
The S&P 500 rose 0.4%, on track to hit a record high for a third straight day after Thursday’s July 4th Independence Day holiday break. The Dow Jones Industrial Average was up 14 points, or less than 0.1%, as of 2:30 p.m. Eastern time, and the Nasdaq Composite was up 0.8% from its all-time high.
In the bond market, the move was more decisive. Treasury yields fell following a mixed U.S. employment report. Companies hired more workers last month than economists expected, but the job gains still slowed from May’s. Moreover, the unemployment rate unexpectedly rose and the U.S. government said last month’s employment numbers were lower than previously indicated.
Overall, the data reinforced Wall Street’s view that U.S. economic growth is slowing under the weight of high interest rates — just what investors are hoping would tame inflation and encourage the Federal Reserve to start cutting its key interest rate from its highest level in two decades.
The question is whether the economy can stay in this Goldilocks state — not too hot, not too cold — long enough for the Fed to accurately predict its next move. The hope is that the Fed will cut rates early and far enough to keep the slowdown from tipping into a recession, but not so low that inflation regains momentum and rises again.
For financial markets, the clearest takeaway from the jobs report is that the Fed is maintaining its outlook for a cut in its key interest rate later this year, likely in September and possibly as soon as December. The yield on the two-year Treasury note, which tracks closely with expectations of Fed action, fell to 4.60% from 4.71% late Wednesday.
The yield on the 10-year Treasury note, the backbone of the bond market, fell to 4.27% at Wednesday’s close, down from 4.36% and 4.70% in April, a notable move for the bond market and one that has helped support stocks.
Friday’s jobs report follows a wave of data pointing to a slowdown in the overall U.S. economy. Reports earlier this week showed business activity in both the U.S. service and manufacturing sectors contracted last month, weaker than economists expected. They also showed how lower-income American shoppers are still struggling to keep up with rising prices as credit card debt balances soar.
“The big question for long-term investors is whether the recession fears come true,” said Brian Jacobsen, chief economist at Annex Wealth Management. “We think a recession is unlikely this year or next, but that doesn’t mean the market doesn’t fear one.”
On Wall Street, gold miner Newmont rose 2.2%, the biggest gainer in the S&P 500 index. The company benefited from rising gold prices, which typically rise when interest rates fall. This means that rising interest rates and rising bond yields could scare investors away from gold, which doesn’t provide any benefits to its holders.
Gains in some big, influential stocks also helped support the market, despite declines across most of the S&P 500. Meta Platforms rose 4.9% and Apple added 1.7%.
Amazon rose 1.2% after Saks Fifth Avenue’s parent company announced a deal to buy Neiman Marcus Group for $2.65 billion, giving Amazon a minority stake in the company.
Among the losers on Wall Street were companies closely tied to cryptocurrency trading, as bitcoin fell from nearly $63,000 earlier this week to below $54,000, bringing the value of the cryptocurrency back to nearly its February levels.
Coinbase Global fell 0.8% and Robinhood Markets dropped 1.1%.
In international stock markets, London’s FTSE 100 index fell 0.5 percent after British voters ousted the Conservative Party and installed a new government in this week’s general election.
Britain has endured years of turmoil under Conservative governments that have left many voters pessimistic about the country’s future. Britain’s departure from the European Union was followed by the coronavirus pandemic and Russia’s invasion of Ukraine, which have hit the economy hard. Rising poverty and cuts to public services have led to discontent with a “broken Britain.”
Germany’s DAX rose 0.1% after the government agreed on a 2025 budget and stimulus package for Europe’s largest economy, ending a months-long dispute that had threatened to topple Chancellor Olaf Scholz’s center-left coalition.
The disagreements have led to the collapse of an already unpopular government, triggering early parliamentary elections and raising speculation that Germany could follow other European countries in moving politically to the right.
In Asia, Japan’s Nikkei stock average topped 41,000 points early on Friday, surpassing the all-time high it hit on Thursday, but closed slightly lower.
__
Business writers Matt Ott and Elaine Kurtenbach contributed.
This article has been generated from an automated news agency feed without any modifications to the text.
3.6 Million Indians visited us in a single day and chose us as their platform for Indian general election results. Check out the latest updates here!
