NEW YORK (AP) — U.S. stocks headed for new records Friday after a long-awaited report The gyrations in the jobs market have boosted Wall Street's hopes that interest rates could ease soon.
The S&P 500 was up 0.3% in midday trading and on track to set a record high for a third straight day after Thursday's break for the July 4 holiday. The Dow Jones Industrial Average was virtually flat at 12:10 p.m. ET, and the Nasdaq Composite Index added 0.7% to its own record high.
The action was more decisive in the bond market, where Treasury yields fell after a mixed U.S. jobs report. Employers hired more workers last month than economists expected, but the number of hires was still down from May. In addition, the unemployment rate unexpectedly rose and the U.S. government said hiring in previous months was lower than it had previously reported.
Overall, the data reinforced Wall Street's belief that U.S. economic growth is slowing under the weight of high interest rates. That's precisely what investors want to see, because a slowdown keep a lid on inflation and could push the Federal Reserve to begin cutting rates its main interest rate, which is at its highest level in two decades.
The question is whether the Federal Reserve can time its next steps precisely, cutting rates early enough and by enough to prevent the slowdown from sliding into a recession, but not so much that it allows inflation to pick up steam and start up again.
The jobs report made clear that the Fed is on track to cut its key interest rate later this year, likely in September. The yield on two-year Treasury notes, which closely tracks expectations of Fed action, fell to 4.61% from 4.71% late Wednesday.
The yield on the 10-year Treasury note, the centerpiece of the bond market, fell to 4.28% from 4.36% late Wednesday and 4.70% in April. That's a notable development for the bond market and provides support for stock prices.
Friday's jobs report follows a slew of data showing a slowdown in the U.S. economy. Reports earlier this week showed that business activity in the U.S. services and manufacturing sectors contracted last month, coming in weaker than economists had expected. lower end of the income spectrum have shown how difficult it is to keep up with prices that continue to rise, as balances due credit card swell.
What matters for long-term investors is whether recession fears materialize, said Brian Jacobsen, chief economist at Annex Wealth Management. We think it’s unlikely we’ll see a recession this year or next, but that doesn’t mean markets won’t fear one.
On Wall Street, gold miner Newmont rose 1.9%, one of the biggest gains in the S&P 500. It benefited from a slight increase in the price of gold, which generally benefits from falling interest rates. That's because high-yield bonds can draw investors away from gold, which doesn't pay off for its holders.
Gains for some important and influential actions also helped support the market, even as most S&P 500 stocks fell. Meta Platforms rose 4.5% and Apple added 1.7%.
Amazon rose 1.4% after announcing a deal where the parent company of Saks Fifth Avenue to Acquire Neiman Marcus Group for $2.65 billion. Amazon will hold a minority stake in the deal.
Companies closely tied to the cryptocurrency business were the biggest losers on Wall Street, with bitcoin briefly falling below $56,000 from nearly $63,000 earlier in the week. The cryptocurrency's value has returned to where it was in February.
Coinbase Global fell 1.4% and Robinhood Markets fell 1.7%.
In overseas stock markets, London's FTSE 100 fell 0.6% after British voters ushered in a new regime by ousting the Conservatives this week. national election.
The United Kingdom has endured a turbulent run of years under Conservative rule, leaving many voters pessimistic about the future of their country. Britain’s exit from the European Union, followed by the COVID-19 pandemic and Russia’s invasion of Ukraine, have battered the economy. Growing poverty and cuts to public services have prompted complaints of a broken Britain.
Germany's DAX rose 0.1% after the government agreed to a budget for 2025 and a recovery plan for Europe's largest economy, ending a months-long feud that threatened to topple Chancellor Olaf Scholz's center-left coalition.
The disagreements have fueled speculation that the already unpopular government could collapse and trigger early parliamentary elections in which Germany could follow other European countries in turning to the political right.
In Asia, Japan's Nikkei 225 rose above the 41,000 level early Friday to top its record closing level set on Thursday, but it ended the day slightly lower.
AP Business reporters Matt Ott and Elaine Kurtenbach contributed to this report.
