Jobs report misses forecasts
US stocks have closed higher as investors digested employment data and its implications for interest rates.
The Dow Jones has lifted more than one per cent, posting a record closing high and a fourth straight week of gains ahead of the long holiday weekend, as a softer-than-expected US jobs report eased worries about interest rate hikes.
The Nasdaq ended lower with investors selling down chipmakers, while the S&P 500 was flat, although both indexes registered gains for the week overall. The US market will be closed on Friday in observance of the US Independence Day holiday.
The Dow's four-week streak of gains was its longest since October 2024. The US non-farm payrolls report showed the economy added 57,000 jobs last month, far below economists' estimates for a rise of 110,000.
The unemployment rate was 4.2 per cent, in line with expectations of 4.3 per cent. The employment report followed a run of strong job gains recently. Expectations for a rate hike from the Fed decreased after the report, according to CME FedWatch.
For the September meeting, hike expectations dimmed to 55 per cent from 64.1 per cent.
The jobs report “doesn't mean the fear of inflation is over,” said Adam Sarhan, chief executive at 50 Park Investments in New York.
“It just takes the pressure off the Fed to raise rates in the short term.”
Investors have been worried about inflation especially given sharp gains in oil prices at the start of the Iran war.
Apple leads market higher
Apple shares rose 4.8 per cent and helped to support all three major indexes, with Nikkei Asia reporting Apple plans to launch five new iPhone models. The Dow Jones Industrial Average rose 594.83 points, or 1.14 per cent, to 52,900.07, the S&P 500 gained 0.01 points to 7,483.24, and the Nasdaq Composite lost 207.36 points, or 0.80 per cent, to 25,832.67.
The semiconductor index remains up about 78 per cent for the year to date. Tesla shares dropped 7.5 per cent even though the electric carmaker posted second-quarter deliveries above estimates.
