Stocks finished lower Friday, but posted a win for the week, as investors picked through a key May employment report that will test the market's bets on a September Federal Reserve interest rate cut.
The Dow Jones Industrial Average slipped 87 points, or 0.22%, to finish at 38,798.99, while the S&P 500 finished essentially even, off 0.11%, to 5,346.99, after reaching an intraday all-time high earlier in the session. The tech-heavy Nasdaq dipped 0.23% to 17,133.13.
All three of the major averages are on pace for a winning week. The Dow has a 0.6% gain, while the S&P 500 is higher by nearly 1.1% and the Nasdaq is on pace for a 1.7% advance, according to CNBC.
The U.S. Labor Department said 272,00 new jobs were created last month, up from a revised April total of 165,000 and well ahead of the Street's 185,000 forecast.
Wages were hotter, too, with average hourly earnings rising 0.4% on the month and 4.1% on the year, adding to concerns that a healthy economy continues to stoke inflation pressures.
Bill Adams, chief economist for Comerica Bank, said “the May jobs report is a Rorschach blot.”
“Optimists about the growth outlook will see solid payrolls growth as a sign the expansion continues unabated,” he said. “Pessimists will focus on the unemployment rate’s uptick to the highest since early 2022, the increase in part-time employment, and the dip in temporary employment, which is often a leading indicator of broader job market weakness.”
Adams said that if core inflation continues to slow in the next few months, the Federal Reserve "will likely feel comfortable beginning to reduce interest rates with a quarter percentage point rate cut at their September meeting."
Updated at 12:23 PM EDT
Here, kitty ... kitty
Keith Gill's highly-anticipated YouTube livestream event has yet to begin, running well past its noon Eastern start time, as GameStop shares continue to slide into the early afternoon.
GameStop shares were last marked 27% lower on the session at $33.75 each, but have risen more than 90% since Gill, better-known by his online moniker 'Roaring Kitty', returned to social media following a three year silence early last month.
Updated at 10:53 AM EDT
Turning green
Stocks are edging higher into the late morning session, with the S&P 500 now 14.5 points, or 0.27% into the green and the Nasdaq up 18 points, or 0.11%. The Dow was last marked 186 points higher.
Curiously, Treasury yield are also on the rise following the stronger-than-expected May jobs report, with 10-year notes pegged at 4.424% and 2-year notes trading at 4.859%.
Total jobs in the US increased 1.8% over the last year, the lowest YoY growth rate since March 2021. Labor market continues to loosen, slowly moving back to normal. https://t.co/uH9SprNhns pic.twitter.com/t3hGUuDNGA
— Charlie Bilello (@charliebilello) June 7, 2024
Updated at 9:38 AM EDT
Soft open
The S&P 500 was marked 17 points, or 0.31% lower in the opening minutes of trading while the Dow fell 124 points and the Nasdaq retreated 54 points, or 0.32%.
S&P 500 Opening Bell Heatmap (Jun. 07, 2024)$SPY -0.32% 🟥$QQQ -0.20% 🟥$DJI -0.23% 🟥$IWM -1.18% 🟥 pic.twitter.com/UBJnKAWEHZ
— Wall St Engine (@wallstengine) June 7, 2024
Updated at 9:20 AM EDT
Game Stopped?
GameStop shares gave back around half of their Thursday gains in premarket trading after the video game retailer posted a big first quarter loss and unveiled plans to sell another 35 million in common stock.
The moves come just hours ahead of a planned YouTube livestream event from meme stock investor Keith Gill, better known as 'Roaring Kitty' whose return to social media last month sparked a $10 billion rally in the money-losing retailer.
Related: GameStop slides amid Roaring Kitty YouTube return, slumping sales
Updated at 8:46 AM EDT
A job in every pot
A hotter-than-expected May jobs report is pounding Fed rate cut bets and sending stocks firmly lower in premarket trading.
The Labor Department said 272,00 new jobs were created last month, up from a revised April total of 165,000 and well ahead of the Street's 185,000 forecast.
Wages were hotter, too, with average hourly earnings rising 0.4% on the month and 4.1% on the year, adding to concerns that a healthy economy continues to stoke inflation pressures.
Stocks moved lower in the wake of the release, with the S&P 500 called 29 points in the red and the Dow looking at a 170 point slump.
Benchmark 10-year note yields added 10 basis points to trade at 4.404% while 2-year notes jumped 11 basis points to 4.855%.
The US Unemployment Rate moved up to 4.0% in May, the highest level since January 2022. In April 2023 it hit a 53-year low of 3.4%. Remains well below the historical average of 5.7% since 1948.https://t.co/mpJBYGzNyy pic.twitter.com/JnT5mcEl23
— Charlie Bilello (@charliebilello) June 7, 2024
Stock Market Today
Stocks finished modestly lower Thursday, after touching intraday highs earlier in the session, as a pullback in some megacap tech names such as Nvidia (NVDA) and Apple (AAPL) offset the ongoing rally in Treasury bonds.
Friday's session, however, will be dominated by reaction to the Labor Department's May employment report, which is expected to show the economy added 185,000 new jobs last month while the headline unemployment rate held steady at 3.9%.
Related: Jobs report to highlight shift from hot inflation to cooling labor market
With a slew of job-market data this week signaling weak momentum heading into the summer months, a softer-than-expected reading could add to bets that the Fed will make the first of two rate cuts in September.
An upside surprise, meanwhile, could add to concerns that inflation pressures are likely to remain elevated, and that the economy is resilient enough to withstand the Fed's "higher for longer" rate messaging.
Shutterstock-fizkes
"It’s important to note that while we might observe a higher number this month, the broader trend shows a stabilization, if not a slight decline, in the growth rate of new hires," said Ken Tjonasam, portfolio strategist at Global X.
"The recent Jolts and ADP reports have been encouraging, pointing towards a normalization in the labor market, which will certainly catch the Fed’s attention, and the market may continue to reprice for a ‘1 or none’ Fed-cut scenario," he added.
Benchmark 2-year note yields were marked at 4.738% in early New York trading, while 10-year notes held below the 4.3% mark at 4.297%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, slipped 0.01% to 104.089.
The CME Group's FedWatch, meanwhile, pegs the odds of a September rate cut at around 68%, while pricing in little chance of a move at either next week's policy meeting or the July gathering in Washington.
On Wall Street, equity futures suggest a muted open ahead of the jobs data at 8:30 am Eastern Time, with futures tied to the S&P 500 indicating a 3 point bump and the Dow Jones Industrial Average called 5 points higher.
The Nasdaq, meanwhile, is priced for a 31 point opening bell gain.
GameStop (GME) shares were back on the move in premarket trading, following on from yesterday's 47.5% surge. The market's leading meme stock added another 22.2% even as the retailer posted a first-quarter report showing a $32 million loss and a year-on-year sales decline of 29%.
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In overseas markets, Europe's Stoxx 600 slipped 0.33% in Frankfurt following yesterday's 0.25-percentage-point rate cut from the European Central Bank, the first since 2019, while Britain's FTSE 100 fell 0.52% lower in London.
Overnight in Asia, the Nikkei 225 ended the week 0.05% lower amid tepid trading ahead of today's May jobs report, while the regionwide MSCI ex-Japan index rose 0.39% into the close of trading.
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