- A weak jobs report will prompt a decision by the Federal Reserve
- The unemployment rate rose to 3.9% from 3.8% the previous month.
- Wage figures also came in lower than expected, an encouraging sign for inflation
The Dow Jones rallied more than 400 points on Friday as hopes that the Federal Reserve could start cutting interest rates soon after April’s weaker-than-expected jobs report. The Dow Jones Industrial Average rose 410 points (1.1%). The S&P500 rose one percent while the Nasdaq Composite gained 1.7%. Friday’s nonfarm payrolls report showed 1.75 lakh people gained jobs in April, less than the 2.40 lakh jobs expected in a survey of Dow Jones economists. The unemployment rate rose to 3.9% from 3.8% the previous month, according to the Bureau of Labor Statistics. Wage figures also came in lower than expected, an encouraging sign for inflation.
Emily Rowland, co-chief investment strategist at John Hancock Investment Management, said that investors’ fears that the economy was overheating or reviving were reviving hopes of a rate cut. That’s why interest rates are falling, bonds are rising and equity markets are booming. Bad news for the job market means the Fed may start cutting interest rates later this year. Traders are eyeing another rate cut by the end of the year following weaker-than-expected jobs growth in April and moderate wage gains. During the Federal Reserve’s meeting on Wednesday, Chairman Jerome Powell said the central bank was prepared to act if the unemployment rate remained high. We are also prepared to respond to unexpected weakness in the labor market.
Services sector activity declined for the first time in a year
According to a report by the Institute for Supply Management (ISM), services sector activity in the US has declined for the first time since December 2022. ISM Services Index from March
The Dow fell to 49.4, down 2 points and below the Dow Jones estimate of fifty-two.
Shares of Amgen, Apple soar, Cloudfare falls
Shares of Amgen jumped 12% while Apple jumped more than seven percent. Following Apple’s announcement of a $110 billion share buyback, the company’s shares surged. On the other hand, the shares of Cloudfair saw a crash of 11%.
Amgen’s best performance in 15 years
Shares of American multinational biopharmaceutical company Amgen surged 12% on Friday, its best performance in 15 years. Shares of Amgen rose on strong quarterly results and an encouraging update on the company’s obesity drug. Earlier on July 8, 2009, the company’s shares had seen a 14% jump.
