U.S. stocks headed lower on Friday after a better-than-expected May jobs report pushed bond yields higher.
In May, 272,000 jobs were added to the economy, well above economists’ estimates of about 180,000, while average hourly wages rose to 4.1% from an annualized 3.9%.
The yield on ten-year US government bonds rose by 11 basis points to 4.40%, according to the report.
Despite the strong jobs report, the unemployment rate rose from 3.9% to 4.0%, driven by a decline in labor force participation. That is the highest unemployment rate since January 2022.
The strong wage gains have somewhat chilled prospects for an upcoming Federal Reserve rate cut, although the chances of a September rate cut still remain.
According to the CME FedWatch Tool, there is a 50% chance of a rate cut in September, compared to a 55% chance before the jobs report was released.
Carson Group strategist Sonu Varghese said the key takeaway from the May jobs report is that consumers are generally doing fine.
“While unemployment has risen, the big picture is that it is difficult to see consumer weakness given the increase in job growth and above-average wage growth in May,” Varghese told Business Insider.
Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Friday:
Here’s what else is happening today:
In commodities, bonds and crypto:
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West Texas Intermediate crude was steady at $75.55 per barrel. Brent crude, the international benchmark, fell 0.15% to $79.75 per barrel.
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Gold fell 2.08% to $2,341.20 an ounce.
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The yield on ten-year government bonds rose by 11 basis points to 4.40%.
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Bitcoin rose 0.81% to $71,342.
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