Global stocks climbed on Friday, with US Treasury yields dipping after a strong jobs report boosted expectations of a Federal Reserve interest-rate cut. The S&P 500 and Nasdaq hit fresh closing highs, led by communication services, consumer staples, consumer discretionary, and healthcare stocks.
The US economy added more jobs than expected in June, with job growth slowing to a still-healthy pace and unemployment rising to 4.1%. This data suggests that the Fed could start reducing interest rates as inflation slows down.
“Our overall thesis for the economy right now is one that’s cooling but not weak,” said Keith Lerner, co-chief investment officer at Truist Advisory Services in Atlanta. “I think this report confirmed this, but also I think it is the 4% plus unemployment rate that will get the Fed’s attention and probably provides them flexibility likely to start reducing rates. We think it’s likely September,” he added.
The Dow Jones Industrial Average rose 0.17% to 39,375.87, the S&P 500 gained 0.54% to 5,567.19, and the Nasdaq Composite climbed 0.90% to 18,352.76.
Meanwhile, benchmark 10-year Treasury yields slid following the closely watched jobs data. The yield on benchmark U.S. 10-year notes fell 6.9 basis points to 4.278%.
Across the pond, UK stocks gave up earlier gains and finished lower after Keir Starmer’s Labour Party secured a landslide general election victory, ending 14 years of Conservative rule. The market focus in Europe quickly shifted from the British election outcome to Sunday’s second-round legislative election in France.
The dollar index, which measures the greenback against a basket of currencies, fell 0.28% to 104.87. Sterling strengthened 0.45% to $1.2815, and the euro was up 0.25% to $1.0837.
Oil prices settled lower as the rising possibility of a ceasefire deal in Gaza outweighed strong summer fuel demand and potential supply disruptions from Gulf of Mexico hurricanes. Brent crude futures settled 1.02% lower to $86.54 a barrel, after reaching their highest since April earlier in the session. U.S. West Texas Intermediate (WTI) crude futures settled at $83.16 a barrel, down 0.9%.
Gold prices extended gains to their highest level in a month as the U.S. dollar weakened. Spot gold added 1.39% to $2,388.86 an ounce. U.S. gold futures gained 0.8% to $2,378.60 an ounce.
In cryptocurrencies, bitcoin was set for its biggest weekly fall in more than a year on worries over the likely dumping of tokens from defunct Japanese exchange Mt. Gox. Bitcoin fell 3.12% to $56,509.00, while Ethereum declined 5.07% to $2983.11.