Job Market Weakness Lifts US Stocks Ahead of Key Inflation Data
US stocks rose on Friday as employers unexpectedly cut 23,000 jobs in July, raising hopes that interest rate hikes can wait. The S&P 500 gained 0.5%, hovering around its record set on Tuesday.
The Dow Jones Industrial Average jumped 80 points, or 0.2%, and the Nasdaq composite rose 1%. Technology stocks like Nvidia and Broadcom did much of the heavy lifting, increasing by 1.4% and 1% respectively.
The bond market reacted more strongly to the weaker signal on the job market, allowing the Federal Reserve more time before raising interest rates to combat inflation. The yield on the 10-year Treasury fell to 4.65%, down from 4.67% just prior to the jobs update.
Peter Graf, chief investment officer at Amova Asset Management Americas, warned that investors should be wary of the future growth potential of an economy where fewer people are working. The report painted a dimmer picture of the jobs market, which has been one of the brighter areas amid rising inflation and concerns about household spending.