Nasdaq benefits from megacap boost as markets examine payroll data Via Reuters
Written by Ankika Biswas and Lisa Pauline Mattackal
(Reuters) – Wall Street’s leading indexes were on track for a stronger open on Friday as markets reopened after the July 4 holiday, with data showing U.S. job growth slowed to a healthy pace in June.
The Labor Department’s report showed that the number of non-farm payrolls increased by 206,000 jobs in June, which exceeded expectations for an increase of 190,000. However, May’s numbers were revised down sharply to 218,000 from 272,000.
The unemployment rate came in at 4.1%, when it was expected to remain unchanged at 4%. Average hourly earnings rose 0.3%, as expected, and down from a 0.4% increase in May.
“It’s a bad report. The market generally expected that the job gains would be a little lower, but the number was lower than the May report that really worried some people,” said Emily Bowersock Hill, CEO of Bowersock Capital Partners.
“If you are the Fed, you say – what happened in May is not as hot as we thought. The data is not bad enough to warn the markets, and it is not bad enough to worry the Fed.”
The soft reading supported the case for the Federal Reserve to cut interest rates in September, coming after ADP Employment and weekly jobless reports this week showed an easing of labor market conditions.
The probability of a 25 basis point rate cut rose to 72% after the data, according to CME Group’s (NASDAQ: ) FedWatch tool, up from 66%.
As Treasury yields fell after the data, megacaps including Alphabet (NASDAQ: ), Amazon.com (NASDAQ: ) and Meta Platforms (NASDAQ: ) were up about 0.4% each.
Tesla (NASDAQ: ) rose 1.9% after hitting its highest level since early January on Wednesday.
Earlier this week, data also showed the service sector’s employment average fell to a four-year low and factory orders fell sharply, signaling the US economy is losing steam and encouraging market participants to hedge their bets on more rate cuts this year.
That helped the record and the Nasdaq notch a record high close during the holiday-shortened trading session on Wednesday. With the equity market also remaining closed on US Independence Day on Thursday, trading volumes were light for the rest of the week.
At 8:47 am ET, they were up 46 points, or 0.12%, up 4 points, or 0.07%, and up 32 points, or 0.16%.
All three of Wall Street’s major indexes are poised for weekly gains, after the top tech stocks led the S&P 500 and Nasdaq to strong gains in the first half of the year.
With second-quarter earnings just around the corner, it remains to be seen whether Wall Street’s rally will extend beyond major stocks and whether those companies’ earnings can continue to support higher prices.
Macy’s (NYSE: ) jumped 6.9% after a report said Arkhouse Management and Brigade Capital raised their bid to buy the department store chain to about $6.9 billion.
Cryptocurrency-related stocks including Coinbase (NASDAQ:) Global, Riot Platforms (NASDAQ:) and Marathon Digital (NASDAQ:) lost 5%-7% after bitcoin fell to a four-month low.
