Wall Street Gains Momentum: S&P 500 Rises, Job Report Anticipation Looms
Wall Street started June’s first trading session in a positive manner; all indexes scored positive gains. Unlike May’s last trading session, the S&P 500 benchmark covered its losses for this week despite a weak job report.
As of 16:04 am ET, the Nasdaq index was up by 1.28%, driven by a positive increase in most of its high-value stocks. Apple Inc. was up by 1.6%, and Amazon and Tesla had an average increase of 1.6%. Meanwhile, Meta and Netflix skyrocketed by more than 2.5%.
The S&P 500 benchmark rose by 0.99%, and the Dow Jones Industrial Average was up by 0.47%.
Meantime, the dollar indexes posted their first decline for this week; the indexes fell by 0.72% as interest hikes kept stressing the market.
Moving to the expected job report, experts believe that the data that will be released by tomorrow morning will most likely determine the path of the interest rate hike. Investors were betting first on a pause in monetary policy, at least for the month of June.
However, new surveys show that market experts have had a change of heart; some believe that the U.S. Federal Reserve will keep raising interest rates in small amounts till inflation is fully controlled.
Meaning a 25 basis point interest hike is still possible, especially if the released data tomorrow confirms a slowdown in hiring numbers.
That said, investors know that hiring numbers in the U.S. market are getting lower and lower each day. The U.S. is still practicing its tightening policy in the labor market, which has affected manufacturing activities to a large degree.
To put some numbers into perspective, the exciting data will be as follows: the non-payroll frames are expected to rise by 195.00. The unemployment rate is also set to increase to 3.5%, which shows a decline in hiring numbers. The average hourly earning from month to month is set to tick up by 0.3%, while the year-on-year average hourly earning is set to increase by 4.4%.
Moving to the average weekly hours worked, Bloomberg data shows that May’s weekly worked hours might jump to 34.4.
Federal Reserve Chair Jay Powell made a statement before the release of the April jobs report, highlighting the state of the labor market. He acknowledged that the labor market was still “very tight,” indicating a low unemployment rate. However, Powell also mentioned that there were indications of improvements in the balance between labor supply and demand.
This statement suggests that there may have been previous imbalances in the labor market, such as a shortage of skilled workers or a mismatch between job openings and available workers. Powell’s remark implies that these imbalances are gradually being addressed, possibly through increased workforce participation or better alignment between job seekers and available positions.
Meanwhile, the housing market remains tight, and the data shows that mortgage rates scored a new surge of 7%. This, in turn, will complicate things for homebuyers and the bond market as well.