Stocks hit record, US dollar strengthens after jobs data
The Labor Department said nonfarm payrolls increased by 147,000 jobs last month after an upwardly revised 144,000 advance in May, well above the 110,000 estimate of economists polled by Reuters.
Markets dialed back expectations for rate cuts this year from the U.S. Federal Reserve in the wake of the data, with the nearly 25 per cent chance for a cut all but evaporating, while expectations for a September cut are down to about 75 per cent from nearly 98 per cent before the jobs report was released, according to LSEG data.
"July cut is definitely off the table. I was surprised like everybody to get such a strong number," said Sandy Villere, Portfolio Manager with Villere & Co in New Orleans.
"I'm not going to say Goldilocks, but it's pretty amazing given all the crosscurrents, from tariffs to DOGE to whatever. I don't see how you could possibly cut with this strong of a labor market, so pretty amazing."
On Wall Street, the S&P 500 and Nasdaq Composite once again closed at record levels, led by gains in technology as Nvidia shares rose 1.3 per cent as it approached a $4 trillion market capitalization.
Other economic data from the Institute for Supply Management (ISM) showed U.S. services sector activity picked up in June as orders rebounded, but employment contracted for the third time this year.
The Dow Jones Industrial Average rose 344.11 points, or 0.77 per cent, to 44,828.53, the S&P 500 rose 51.93 points, or 0.83 per cent, to 6,279.35 and the Nasdaq Composite rose 207.97 points, or 1.02 per cent, to 20,601.10.
For the week, the S&P 500 gained 1.72 per cent, the Nasdaq rose 1.62 per cent, and the Dow climbed 2.3 per cent.
MSCI's gauge of stocks across the globe rose 5.99 points, or 0.65 per cent, to 926.47 after hitting a record 926.79, and was up 0.3 per cent on the week.
The pan-European STOXX 600 index closed up 0.47 per cent, led by gains in bank stocks, to manage a slight gain for the week.
The dollar strengthened in the wake of the payrolls data, with the dollar index, which measures the greenback against a basket of currencies, up 0.38 per cent to 97.12, with the euro down 0.37 per cent at $1.1754.
The dollar was on track for a second straight gain after nine consecutive sessions of declines, and was down 0.1 per cent on the week.
Against the Japanese yen, the dollar strengthened 0.95 per cent to 145.03. Bank of Japan board member Hajime Takata said the central bank should resume interest rate hikes following a temporary pause to evaluate the impact of U.S. tariffs, signaling optimism the country was on track to durably achieve the central bank's price goal.
Sterling strengthened 0.07 per cent to $1.3645 after a sharp selloff in the prior session across UK assets fueled by fiscal concerns and uncertainty about Rachel Reeves' future as Britain's finance minister.
U.S. Treasury yields jumped following the jobs data, before easing somewhat. The yield on benchmark U.S. 10-year notes rose 5.3 basis points to 4.346 per cent while the 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, shot up 9.7 basis points to 3.886 per cent.
For the week, the 10-year yield rose 6.3 basis points while the 2-year yield was up nearly 14.6 basis points.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
41 minutes ago
- CNA
Commentary: ‘Mr Japan' is entitled to be furious with Trump's copy-and-paste tariffs
TOKYO: 'You will never be disappointed with The United States of America.' So went President Donald Trump's sign-off in his letters issued to 14 trading partners on Monday (Jul 7). But in Tokyo, Prime Minister Shigeru Ishiba will be more than disappointed. He's entitled to be furious. Japan was among the first countries to begin talks after April's 'Liberation Day' tariff announcement. It has spent months in negotiations, with Ishiba's envoy making seven trips to the US for talks with Trump and other officials. The nation has been the largest investor in the US for the past five years and is a crucial security ally. All that only to end up with a tariff rate 1 percentage point higher than first proposed three months ago. To add insult to injury, Japan was lumped in with countries that are far less vital partners, including Kazakhstan and Myanmar. While the threatened rates to be enacted on Aug 1 were different between countries, the copy-and-paste wording sent to the respective leaders was virtually identical, including telling Tokyo to open its 'heretofore closed trading markets' – whatever that means. MORE THREATS CHIP AWAY AT TRUST The warning signs were there after Trump erupted last week. Overnight, it seemed, Japan went from being respected, or 'tough', in Trump parlance, to being 'spoiled'. And while 'Mr Japan', as Trump seemingly dubbed Ishiba, may not have ended up with the 35 per cent tariffs once threatened, months of talks have only led to further threats. In Seoul, recently elected President Lee Jae-myung might be feeling hard done by, too. His country is moving to address US concerns over non-tariff barriers, but has been hampered by the political turmoil prior to Lee's election. Japan might have thought it was getting the first-mover advantage Treasury Secretary Scott Bessent promised to countries that came to the negotiating table fast. Instead, an identical rate has been levied on both countries. Markets in Tokyo and Seoul barely skipped a beat, buying into the TACO (Trump Always Chickens Out) trade as it quickly became clear that the letter was, in effect, an extension of the Jul 9 deadline. Trump's further suggestions that the deadline wasn't '100 per cent firm' make this clearly the latest in his 'Art of the Deal' brinkmanship to wring out more concessions. And in Japan's case, Trump's 25 per cent auto tariffs – the elimination of which is Ishiba's primary goal – are already in effect. That's why the longest-lasting impact of Monday's announcement will be to further chip away at trust between Washington's most vital partner in staring down China. JAPAN'S BIGGEST PROBLEM The prime minister has stood surprisingly firm in the talks, while making good-faith efforts to engage with the US. But might his engagement have been too earnest? Flattery and a bit of exaggeration may have been the better way to go, perhaps taking a page out of SoftBank Group founder Masayoshi Son's handbook in dealing with the president. This might help sidestep Tokyo's biggest problem: The difficulty in understanding what Trump actually wants. Local media have already reported how officials have been baffled by the open disagreements between the US negotiators. A vague hand wave – promises to place an Ford F-150 in every Japanese garage, or whatever Trump wants to hear – might be a better way to buy time. Trump is clearly pulling out the seat at the negotiating table. But Ishiba already has his hands full with crucial Upper House elections on Jul 20, where he can't be seen to be giving concessions or selling rice farmers down the river. Still, the latest move could even be advantageous to him; after all, no one likes a bully. Meanwhile, any expectations that the Bank of Japan will hike rates later this month – at a meeting scheduled the day before the tariffs come into effect – should prepare for disappointment. The longer-term consequences are harder to read. It's possible, even likely, that Trump will have another of his trademark changes of heart, and suddenly Japan, South Korea and the other trading partners will be US friends again. Constantly kicking the can down the road indicates he doesn't really want to follow through with his threats. But such incessant bluster chips away at goodwill built up between the partners over decades. And that's something that can't simply be copied and pasted.
CNA
2 hours ago
- CNA
Apple names insider Sabih Khan as COO
Apple on Tuesday named insider Sabih Khan as its chief operating officer, succeeding Jeff Williams. Get bite-sized news via a new cards interface. Give it a try. Click here to return to FAST Tap here to return to FAST FAST
CNA
5 hours ago
- CNA
JPMorgan expands tech team with Guggenheim veteran, memo says
NEW YORK :JPMorgan Chase is hiring Guggenheim Securities executive Mike Amez, as the country's biggest bank continues to expand its technology investment banking team and to provide specific expertise to medium-sized companies, according to a staff memo. Amez will join as Head of Mid-Cap Technology Services in September and be based in Chicago, Global Co-Heads of Technology Investment Banking Chris Grose and Greg Mendelson wrote in the memo which was seen by Reuters. At Guggenheim, Amez was a senior managing director in the technology investment banking group, specializing in supporting IT services, cybersecurity services and hyperscale cloud infrastructure clients. During his career, Amez "bolstered his expertise in navigating the intricate and rapidly evolving technology sector, while cultivating lasting relationships with clients," Grose and Mendelson wrote. The hire was announced less than six weeks after the bank said it was bringing on four executives from rivals Goldman Sachs, Bank of America and Lazard to work with the technology team in the investment bank on the West Coast. JPMorgan is already a powerful player in tech banking, according to Dealogic data, and is working to deepen its sub-sector expertise, industry analysts said. Recently it landed major deals in the tech sector, including advising Global Payments on its $24.25 billion acquisition of payment processor Worldpay. It also advised Turn/River on its $4.4 billion take-private deal of IT management software maker SolarWinds, as well as DoorDash on its $3.9 billion acquisition of the restaurant delivery platform Deliveroo. It additionally helped CoreWeave with its $23 billion stock debut in March.
