U.S. equities moved higher on Thursday after a softer-than-anticipated June employment report dampened expectations for additional Federal Reserve interest rate increases, while investors continued to weigh the balance between growth and inflation.
The Dow Jones Industrial Average climbed 256 points, or 0.49%. The S&P 500 added 0.39%, and the Nasdaq Composite rose 0.24%.
The Labor Department's nonfarm payrolls report showed the U.S. economy added only 57,000 jobs in June, well below the 110,000 estimate from Reuters and the 115,000 forecast by economists surveyed by Dow Jones. The unemployment rate came in at 4.2%, slightly better than the expected 4.3%.
Bond Yields Slide as Rate Hike Odds Decline
The disappointing jobs data pushed Treasury yields lower, with the two-year note yield declining as traders increased bets that the Federal Reserve may delay further tightening. According to LSEG data, the probability of at least one Fed rate hike this year fell to 75.6%, down from roughly 84% before the report.
Julien Lafargue, chief market strategist at Barclays Private Bank, noted in a Reuters report that the employment figures may have been influenced by temporary hiring related to the FIFA World Cup. He added that markets are likely to place greater weight on the June consumer price index (CPI) report due July 14, as inflation data will offer a cleaner read on the economy.
The jobs data followed remarks from Federal Reserve Chair Kevin Warsh on Wednesday, who acknowledged that inflation risks have eased while reiterating the central bank's commitment to its 2% target.
Chip Stocks Mixed After Selloff
Technology shares showed a mixed recovery after leading the previous session's declines. Micron Technology gained roughly 2%, and Arm Holdings advanced 0.46%. However, Intel and AMD fell 0.92% and 1.83%, respectively. Bending Spoons dropped 3% in trading, a day after the Vimeo owner surged 40% during its Nasdaq debut.
For more on chip sector dynamics, see our earlier report: Micron Stock Dips 1.4% as Goldman Flags Elevated Expectations Ahead of June 24 Earnings.
Global Markets Mixed Amid Geopolitical Uncertainty
Global equity markets delivered mixed performances on Thursday. In Asia, South Korea's Kospi dropped 7.89% to its lowest closing level since June 8, while the small-cap Kosdaq fell 6.74%. Samsung declined 9.06%, and SK Hynix plunged 14.57%. Japan's Nikkei 225 lost 2.47%, though the broader Topix edged up 0.09%. Australia's S&P/ASX 200 finished little changed.
European markets recovered from early weakness, with the pan-European Stoxx 600 rising 0.6% in morning trading as investors rotated into defensive sectors including utilities, healthcare, and consumer staples.
Markets also continued to monitor geopolitical developments after the United States and Iran concluded another round of indirect talks on Wednesday without any indication of progress toward a lasting peace, adding another source of uncertainty for investors.
For broader market context, see: Dow Rises 86 Points as Nasdaq Slides on Chip Selloff, SpaceX IPO Looms.
This article is for informational purposes only and does not constitute financial advice.
