Stocks fall after jobs report beats expectations

U.S. stocks fell Friday after a jobs report seen as key to expectations of lower interest rates showed much stronger hiring growth than expected.

The S&P 500 (^GSPC) fell 0.3%, while the Dow Jones Industrial Average (^DJI) lost 0.2%, after a lackluster session Thursday for all three major indicators. The tech-heavy Nasdaq Composite (^IXIC) fell about 0.4%.

Investors bid up stocks, hoping new data would suggest an economic slowdown. But the Labor Department report provided more evidence that parts of the economy are too hot for the central bank to fight inflation, fueling talk that interest rates would be kept at lower levels for longer. high levels.

May’s highly anticipated jobs report reinforced the view that falling rates from their two-decade highs likely won’t happen until the fall.

The U.S. economy added 272,000 jobs in May, beating expectations. However, the unemployment rate increased slightly, reaching 4.0%.

Learn more: How does the labor market affect inflation?

Elsewhere in the markets, we’re also awaiting a livestream apparently promised by GameStop (GME) booster Keith Gill, aka “Roaring Kitty.” The event, scheduled for Friday at noon ET, would be Gill’s first live appearance on YouTube since he helped spark the meme stock rally three years ago.

GameStop shares closed up 47% on Thursday, but fell sharply after the video game retailer announced it would sell up to 75 million shares and said its sales declined in the first quarter .

The completion of Nvidia’s (NVDA) 10-for-1 stock split, expected after the market close, is also on the cards. A midweek rally briefly propelled the AI ​​chipmaker to a $3 trillion valuation, but its shares have lost steam as short bets against the company pile up.

Live3 updates

  • Stocks fall as rate cut expectations wane

    The May jobs report, released hotter than expected, further dented the narrative that the Federal Reserve would soon cut interest rates. The latest figures offer another signal that defies earlier signs the economy is slowing.

    The S&P 500 (^GSPC) fell 0.3%, while the Dow Jones Industrial Average (^DJI) lost 0.2%, after a lackluster session Thursday for all three major indicators. The tech-heavy Nasdaq Composite (^IXIC) fell about 0.4%.

  • Eyes on Robinhood

    Robinhood (HOOD) remains on several impressive streaks.

    On the one hand, the stock price: it has increased by 27% in the last 30 days. And second, the flow of news – from the launch of a new credit card, to the announcement of a strong first quarter, to spending $200 million yesterday to buy crypto exchange Bitstamp.

    “This is a strategic move by HOOD to grow its crypto business, and we believe it validates our thesis that HOOD is a great way to seek exposure to crypto stocks at the start of an exciting new cycle of cryptography,” Bernstein’s Gautam Chhugani said this morning.

    I had coffee with Robinhood co-founder and CEO Vlad Tenev yesterday afternoon after the Bitstamp deal. The guy has his swagger back, but you can tell he’s gained a whole new level of experience after going through what he did several years ago – from layoffs to testifying about the GameStop (GME) craze. Keep an eye on what the company does next when it comes to wealth management.

    Our latest discussion on Yahoo Finance Live below.

  • Reminder when reading the jobs report

    The market still wants to believe in rate cuts for 2024.

    Keep this in mind as you look through today’s jobs report and think about how it might influence Fed policy.

    Good point from Jim Reid of Deutsche Bank this morning after the ECB rate cut yesterday:

    “And while the tone was a bit hawkish in many respects, this now makes it the fourth central bank in the G10 to have cut rates, after Canada, Sweden and Switzerland. “Monetary policy is moving toward an easing mode, with investors expecting further cuts on the horizon. This marks a significant change from much of the past two years, when central banks were increasing quickly their rates to try to bring down inflation.