S&P 500 near record high with jobs data coming

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US stocks held near all-time highs on Friday as investors weighed the June jobs report, which will play into the Federal Reserve’s rate cut calculations.

The S&P 500 (^GSPC) slipped slightly below the flat line late in the report after posting a record close in a shortened session on Wednesday. The Dow Jones Industrial Average (^DJI) fell 0.2%, while the Nasdaq Composite (^IXIC) gained 0.3%. All three gauges were closed Thursday for the Fourth of July holiday.

The US economy added 206,000 jobs in June, more than the 190,000 expected on Wall Street. But the jobless rate rose unexpectedly to 4.1%, its highest level since November 2021, in another sign that the labor market continues to cool.

Signs of looser conditions in jobs data earlier this week reinforced the idea that inflation will continue to ease, setting the stage for the Fed to cut interest rates from their current two-decade high. Traders are now pricing in a 75% chance of a September cut, according to CME’s FedWatch tool.

The yield on the 10-year Treasury (^TNX) fell to 4.31% in morning trading, continuing a slide for the week.

Investors are weighing on Friday’s jobs data to decide whether the slowdown in monthly job growth reflects a normalization in the labor market as it shakes out from the pandemic, or marks the early signs of a broader economic slowdown.

Elsewhere, the Labor Party’s landslide victory in the UK election caught the attention of investors monitoring political risk, especially as the US presidential election approaches. With some major donors calling for President Joe Biden to step down, eyes are on Donald Trump’s growing lead in the polls and what that could mean for the markets.

On the corporate front, Samsung Electronics ( 005930.KS ) quarterly profit rose to 15 times a year ago, lifting the stock to a three-year high, boosted by the AI ​​boom.

Crypto-related stocks Coinbase Global ( COIN ) lost 4% and Marathon Digital ( MARA ) fell about 6% in morning trading as bitcoin (BTC-USD) fell to its lowest level against the dollar since February.

LIVE4 updates

  • Stocks trending in morning trading

    Here are some of the stocks leading Yahoo Finance’s trending indicators page during morning trading on Friday.

    Tesla (TSLA): Shares of Tesla retreated some after investors sent the EV maker up nearly 25% over the past week after the company reported vehicle deliveries that beat Wall Street expectations. More broadly, investors are rooting for a positive quarterly report later this month and a robotaxi to be unveiled in early August that analysts say will shape the next phase of Tesla’s story. Shares were down less than 1% in morning trading.

    Currency base (coins): The crypto market is spinning and taking crypto companies down with it. The cryptocurrency exchange fell 5%, reflecting the fall in prices of Bitcoin (BTC-USD), the most popular and largest cryptocurrency by market cap. Bitcoin fell to its lowest level against the dollar since February. Crypto miner Marathon ( MARA ) fell 7% and online broker Robinhood ( HOOD ) sank 4%.

    Macy’s (M): Shares of the troubled convenience store chain rose nearly 10% on Friday morning after a report that an investor group has proposed for a second time to buy it. The latest offer is $300 million higher than the previous one.

    Samsung Electronics (005930.KS): The manufacturing conglomerate gained 3% on Friday morning after the company reported that quarterly profit rose to 15 times a year earlier, lifting the stock to a three-year high, fueled by the AI ​​boom.

  • Stocks hold steady as the unemployment rate rises

    US stocks held near all-time highs on Friday as investors analyzed how June’s jobs report, which showed a slightly higher unemployment rate, will affect the Federal Reserve’s interest rate decision. .

    The S&P 500 (^GSPC) was little changed at the end of the report. The Dow Jones Industrial Average (^DJI) slipped below the flat line, while the Nasdaq Composite (^IXIC) stayed above it. Friday’s trading session continues the action from Wednesday, as all three gauges were closed on Thursday for the July 4 holiday.

  • Pressure is mounting for the Fed to act

    There’s no doubt what the story will be coming out of Friday’s jobs report — the Federal Reserve is in danger of ending up behind the curve.

    It means the central bank could end up cutting rates too late, just as many believe it was too slow to raise interest rates in 2022.

    With the jobless rate now at its highest level since November 2021, other data — such as a rise in persistent jobless claims and a drop in job openings — are beginning to look like they have sent a clear signal that key gains of jobs have overestimated the strength of the labor market.

    Inflation data continue to slow toward the Fed’s 2% target, although that progress appears to have stalled in the early months of the year.

    The Powell Fed’s sensitivity to inflation data running above its target after the 40-year high in prices seen in 2022 has been the dominant feature of this policy regime. But the labor market is starting to speak louder and clearer: things are getting challenging for more workers.

    Neil Dutta at Renaissance Macro has become the leading voice on Wall Street saying the Fed needs to be stronger this fall in cutting rates. In a note just minutes after Friday’s report came out, he said: “Today’s employment report should strengthen expectations for a September rate cut. Economic conditions are cooling and that makes the tradeoffs different for the Fed .”

    According to Dutta, the Fed’s July meeting should set the stage for a September rate cut.

  • Job gains are subdued, but unemployment rate rises to highest level since 2021

    The U.S. labor market added more jobs than expected in June, while the unemployment rate rose unexpectedly, reaching its highest level since November 2021, in another sign that the labor market continues to cool.

    Data from the Bureau of Labor Statistics released Friday showed the U.S. economy added 206,000 nonfarm payroll jobs in June, more than the 190,000 economists expected.

    The unemployment rate rose to 4.1%, up from 4% last month and the highest reading in almost three years. June’s job additions were a slight drop from May, which saw job gains revised up to 218,000 on Friday from the 272,000 initially reported last month.

    Stock futures returned higher after the report, adding to gains after the market traded at record highs earlier this week amid a flurry of softer-than-expected economic data, including readings on inflation that lead the US back down a “disinflationary path”. According to the chairman of the Federal Reserve, Jerome Powell.

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