4:05pm: Dow, Nasdaq, S&P 500 all higher
US stocks powered to the finish on Friday after May's jobs data blew past expectations.
At the close, the Dow led markets higher with a 2.2% gain on the day to finish at 33,763 points. The S&P 500 wasn't far behind with a 1.5% increase at 4,282 and the Nasdaq followd with a gain of 1.1% to close at 13,241.
But the unexpectedly strong jobs report could cast a pall over the next FOMC meeting, where Powell and Co were widely expected to keep interest rates at the same level.
It’s widely expected that the Fed will hold off on making a decision at the June meeting and instead hike rates again in July, but a “hot” core CPI print on June 13 could yet tip the balance, according to Knightley, echoing the wider view from the Street.
“Remember, too, that labour data is the most lagging of all the data releases and is the worst guide for where the economy is actually heading,” Knightley said, leaving investors guessing as to the Fed's next move.
12:05pm: Stocks climb after 29th straight month of positive job growth
US stocks were higher in noon trading after nonfarm payrolls increased by 339,000 in May, much better than the 190,000 positions expected by economists polled by Dow Jones.
At midday, the Dow rose 602 points to 33,664, while the S&P 500 added 57 points at 4,278 and the tech-heavy Nasdaq gained 133 points to 13,234.
“Much stronger-than-expected US job creation data points to a robust economy even if the unemployment rate rose to a higher-than-expected 3.7%,” IG senior market analyst Axel Rudolph said.
Notable movers included shares of Lululemon Athletica (NASDAQ:LULU) Inc, which jumped 13% after the athleisure company’s 1Q top and bottom line beat estimates and Lululemon also raised its full-year outlook.
9:42am: Investors relieved by jobs report, debt ceiling deal
Shortly after the opening bell, the Dow was up 223 points, 0.7%, to 33,326, the Nasdaq Composite improved 139 points, 1.1%, to 13,240 and the S&P 500 added 40 points, 0.1%, to 4,261.
Investors were pleased to see the May jobs report come in much hotter than expected. The US economy added 339,000 jobs in May compared to expectations of just 190,000. Unemployment rose to 3.7% from 3.4% in April.
“We knew people would burn through Covid-related savings and eventually return to the workforce. The effect is naturally a higher unemployment rate and increased supply of labor also slows wage growth,” said Bryce Doty, senior portfolio manager at Sit Fixed Income Advisors. “Today’s job data is a welcome sign that the labor force is finally beginning to normalize.”
Also helping sentiment is the debt ceiling deal that passed through both chambers of Congress this week, successfully averting a US default.
8:44am: US adds roughly 140K more jobs than expected
US employers added 339,000 jobs in May, the Labor Department said on Friday, an increase from a revised total of 294,000 in April and significantly more than the 190,000 new jobs expected by analysts.
The unemployment rate was 3.7%, up from 3.4%.
The surprisingly resilient economic picture pushed Dow futures up 0.4%, while Nasdaq Composite and S&P 500 futures were up 0.5% and 0.4%, respectively.
7:50am: All eyes on NFP report
US stocks are likely to open higher ahead of a key employment report after the US Senate passed a bill to raise the debt ceiling above the current $31.4 trillion.
Futures for the Dow Jones Industrial Average rose 0.5% in Friday pre-market trading, while those for the broader S&P 500 index and contracts for the Nasdaq-100 were also 0.5% higher.
After passing through the House of Representatives on Wednesday, the Senate approved a debt deal negotiated by President Joe Biden and House Speaker Kevin McCarthy last weekend, averting a US default.
Ahead of that, the S&P 500 closed nearly 1% higher on Thursday at 4,221, the Dow finished around 0.5% firmer at 33,062 and the Nasdaq had the biggest lead of the three major indices, up 1.3% at 13,101.
“Investor optimism ahead of the Senate vote proved to be well-founded as the debt ceiling issue was resolved, with just days to go, after the closing bell,” commented Richard Hunter, head of markets at interactive investor.
“While the issue was expected ultimately to reach a satisfactory conclusion, there was nonetheless relief as the legislation avoids what would have been a disastrous US default. Attention will now revert to the other pressing issues of the day, most notably the next move on interest rates from the Federal Reserve.”
Hunter noted that recent comments from Fed members have also lifted market sentiment, suggesting that the time for a pause in the rate hiking cycle might now be appropriate.
“The consensus has swung again to a reported 75% chance that there will be no hike at the upcoming June meeting,” he added.
“However, a strong non-farm payrolls report later today could upset that particular applecart. The current forecast is for 190,000 jobs to have been added in May, as compared to a figure of 253,000 the previous month.”