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US stocks fell on Friday as investors digested the May jobs report.
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A strong wages report pushed forward expectations of a Fed rate cut later this year.
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“Today’s data undermines the message that other recent economic data has given about a cooling U.S. economy.”
US stocks closed slightly lower on Friday, but ended the week more than 1% higher after a May jobs report that came in much warmer than expected.
Data shows 272,000 jobs were added to the economy last month, well above economists’ estimates of about 180,000.
The report also saw the unemployment rate rise from 3.9% to 4.0%, suggesting there is some weakness in the labor market offsetting stronger-than-expected wage numbers.
Meanwhile, average hourly wages rose to 4.1% from 3.9% annually, reviving inflation concerns and dispelling the likelihood of a Fed rate cut from September to December.
According to the CME FedWatch Tool, there is only a 47% chance of a rate cut in September, compared to a 55% chance before the jobs report was released.
“Today’s data undermines the message that other recent economic data have given about a cooling US economy, slamming the door on a rate cut in July,” said Seema Shah, chief strategist at Principal Asset. “We still expect the Fed to cut rates in September, but another round of prints like today’s could probably take that off the table as well.”
Here’s where the US indexes stood at 4pm on Friday:
Here’s what else happened today:
In commodities, bonds and crypto:
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West Texas Intermediate crude fell 0.34% to $75.29 per barrel. Brent crude, the international benchmark, fell 0.60% to $79.39 per barrel.
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Gold fell 3.38% to $2,310.00 an ounce.
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The yield on ten-year government bonds rose by 14 basis points to 4.43%.
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Bitcoin fell 2.20% to $69,216.
Read the original article on Business Insider
