(Reuters) – The New York Stock Exchange opened flat on Friday after the release of the monthly U.S. labor market report, which showed a lower-than-expected number of jobs but a slowing unemployment rate.
In early trading, the Dow Jones index gained 0.59%, the Standard & Poor’s 500 rose 0.15% and the Nasdaq Composite lost 0.21%.
Investors are digesting U.S. jobs data on Friday, released shortly before the New York Stock Exchange opens, to get a sense of the magnitude of rate cuts to come.
The Labor Department’s much-anticipated employment report, which came after a series of worrying data on the U.S. economy, showed that nonfarm payrolls rose by 142,000 in August, compared with an estimate of 160,000 by economists polled by Reuters. The unemployment rate fell to 4.2 percent last month, in line with expectations after rising to 4.3 percent the previous month.
The U.S. labor market is under scrutiny from investors after an unexpected rise in the unemployment rate sparked recession fears nearly a month ago, sending the Nasdaq down more than 10% and sending global markets into a tailspin.
Analysts said Friday’s data should give the Fed more confidence in cutting rates by 50 basis points instead of 25.
CME Group’s FedWatch tool shows that 49% of traders are now betting on a 25 basis point interest rate cut in September, while those betting on a deeper 50 basis point cut have risen to 51% from 30% a week ago.
“Overall, the data was relatively in line, but maybe a little weaker than expected,” said Scott Ladner, chief investment officer at Horizon Investments.
“The bets have been more toward 50 basis points (…) there’s frankly no reason for the Fed to be as tight as it is,” he added.
In values, BroadCom fell 7.5% at the opening, the chipmaker having said Thursday that it expected fourth-quarter revenue to be slightly below expectations, penalized by weak spending in its broadband segment.
Super Micro Computer lost 4% after JP Morgan lowered its recommendation from “overweight” to “neutral”.
(Written by Diana Mandiá)
Copyright © 2024 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
