On the evening of the 5th Beijing time, the US stock market opened basically flat on Friday, and the three major US stock indexes will all have gains this week. The significant drop in non-farm payroll employment in the US in June and the unexpected rise in the unemployment rate to 4.1% strengthened the Fed's reason for rate cut.
The three major indexes saw mixed gains and losses. As of press time, the Dow was down 0.21%, the Nasdaq was up 0.44%, and the S&P 500 was up 0.07%.
The US stock market was closed on Thursday for Independence Day. The three major stock indexes are expected to gain this week. As of this week, the Nasdaq and the S&P 500 index have risen more than 2.5% and 1.4% respectively, both of which hit intraday and closing historical highs on Wednesday. During the same period, the Dow rose by 0.5%.
Investors welcomed the labor market data that has attracted widespread attention on Friday.
The US Department of Labor reported that non-farm payrolls increased by 0.206 million in June, while May's data was significantly revised downward to show an increase of 0.218 million instead of the previously reported 0.272 million. Over the past year, the average monthly employment in the US has increased by 0.22 million. The average hourly wage increased by 3.9% year-on-year, the smallest increase since 2021. The wage growth is considered consistent with the Fed's 2% inflation target within the range of 3%-3.5%.
The unemployment rate unexpectedly climbed to 4.1%, the highest level since November 2021. The June non-farm report confirmed that after the inflation soared in the first quarter, the downward trend of inflation has returned to the right track. This may also boost the Fed's confidence in the inflation outlook and push the Fed closer to starting rate cuts later this year. Economist surveyed by Dow Jones earlier predicted that US non-farm payrolls would increase by 0.2 million in June and the unemployment rate would steady at 4%. These economists also expected hourly wage to increase by 0.3% on the basis of May with an expected annual growth rate of 3.9%.
The growth in US employment slowed down in June but remained healthy, as the unemployment rate rose to 4.1%, thus increasing the likelihood that the Fed can curb inflation without causing an economic downturn.
Analysts say that the US June non-farm data shows a slowdown in recruitment, and the data for the past few months has also been revised downward, enhancing the possibility that the Fed will begin to cut rates in the coming months.
Institutions pointed out that the United States added 0.206 million jobs in June. The unemployment rate rose to 4.1%. Despite the fact that the Fed has kept interest rates at their highest level in more than 20 years, the report shows that the labor market remains resilient.
Institutions said that the non-farm employment report showed that US recruitment activities have slowed down, and the labor market seems to have reached a better balance. The unemployment rate has risen from a multi-decade low of 3.4% reached at the beginning of last year. The average hourly wage increased by 3.9% year-on-year, the smallest increase since 2021. Federal Reserve officials are no longer so worried about an overheated job market and expect to cut rates later this year as long as inflation does not break out. But the still-strong employment growth does make them feel more patient before they cut rates.
Analysts said that the US June non-farm data showed a slowdown in recruitment, and data for the past few months has been revised downward, enhancing the possibility that the Fed will begin to cut rates in the coming months.
The latest data today shows that the US labor market is gradually cooling down, which will support the expectation of cutting interest rates later this year. The data is consistent with other employment reports this week, indicating a significant reduction in job vacancies this year and a continuous increase in the number of people applying for unemployment benefits. The continuous slowdown in employment and recent inflation slowdown have supported the bet that Fed policymakers will cut interest rates as early as September. This employment report is the last report before Fed officials meet later this month. The market currently expects the Fed to cut interest rates twice this year.
Institutions pointed out that the United States added 0.206 million jobs in June. The unemployment rate rose to 4.1%. Despite the fact that the Fed has kept interest rates at their highest level in more than 20 years, the report shows that the labor market remains resilient.
Institutions said that the non-farm employment report showed that US recruitment activities have slowed down, and the labor market seems to have reached a better balance. The unemployment rate has risen from a multi-decade low of 3.4% reached at the beginning of last year. The average hourly wage increased by 3.9% year-on-year, the smallest increase since 2021. Federal Reserve officials are no longer so worried about an overheated job market and expect to cut rates later this year as long as inflation does not break out. But the still-strong employment growth does make them feel more patient before they cut rates.
Before that, the ADP data released on Wednesday showed that the private sector employment growth in the United States was lower than expected, and the number of jobless claims filed last week was higher than economists had predicted. In addition, the Institute for Supply Management (ISM) unexpectedly showed a contraction in the service sector index.
Bitcoin fell below $54,000 per coin on Friday, hitting the lowest level since February for the fourth consecutive trading day. At the same time, other cryptocurrencies were also widely sold off.
Cryptocurrency speculators currently face a series of challenges, including the weakening of demand for Bitcoin exchange-traded funds in the US and signs of governments selling confiscated tokens. At the same time, stocks related to cryptocurrencies fell.
Focus stocks
Star technology stocks rose across the board,$Tesla (TSLA.US)$, $Apple (AAPL.US)$, $Amazon (AMZN.US)$, $Microsoft (MSFT.US)$rose more than 1%.
while popular China concept stocks declined,$XPeng (XPEV.US)$falling nearly 10%,$NIO Inc (NIO.US)$falling nearly 9%.$Alibaba (BABA.US)$, $PDD Holdings (PDD.US)$, $JD.com (JD.US)$, $Baidu (BIDU.US)$Dropped more than 2%.
Cryptocurrency concept stocks were generally falling,$Coinbase (COIN.US)$down more than 4%,$MicroStrategy (MSTR.US)$, $Marathon Digital (MARA.US)$down more than 5%.
Golden industrial concept stocks were mostly rising,$AngloGold Ashanti (AU.US)$rose over 5%,$Gold Fields (GFI.US)$rose more than 3%.
$Tesla (TSLA.US)$showed small fluctuations. Musk said that the era of bearishness would end with the production of automatic driving and Optimus. In addition, several state-owned enterprises in Shanghai have ordered the Model Y for business purposes,
$Meta Platforms (META.US)$up over 2%. It recently released its latest AI model, Meta 3D Gen.
$Macy's (M.US)$rose nearly 10%, and the investment consortium raised its acquisition quote to $6.9 billion US dollars.
$Broadcom (AVGO.US)$rose slightly. 'Congress Mountain God' Pelosi revealed that she recently purchased call options on Broadcom.
$NVIDIA (NVDA.US)$fell nearly 1%, and may face anti-monopoly charges in France. Huang Renxun reportedly sold his Nvidia stocks in June for nearly $170 million US dollars.
Editor/Emily