Dow Jones gains 344 points while S&P 500, Nasdaq hit new highs on strong jobs data
A strong labor market means that Fed rate cuts are less likely, but economic optimism still swept Wall Street.
Federal Reserve interest rate cuts might come later than expected, but Wall Street is still optimistic. On Thursday, June 3, the Dow Jones closed higher by 344 points, or 0.77%, while the S&P 500 rose 0.83% in a a shortened session ahead of Friday’s market close. The tech-heavy Nasdaq Composite gained 1.02%. Both the S&P 500 and the Nasdaq reached record levels, as investor optimism boosted the market.
NVIDIA was one of the stronger performers, rising 1.3% and reaching its all-time high. The rally put NVIDIA close to replacing Apple as the most valuable company in the world. The stock achieved a significant rally after a strong Q1 earnings report, showing that the chipmaker was not as affected by U.S. sanctions on China as many traders expected.
Strong labor market boosts the economy
Traders were focusing on the June jobs report, which showed that the labor market remained more resilient than expected. The data revealed a 147,000 increase in non-farm payrolls, beating the forecast of 106,000. At the same time, the unemployment rate fell to 4.1%, even as economists expected it to rise to 4.3%.
A strong labor market has shown that the anticipated tariff-related damage to the economy has not materialized. Despite the potential disruptive effects of U.S. punitive tariffs on its trading partners, employers mostly stayed the course. Notably, businesses managed to avoid layoffs, hoping that the tariffs would be temporary.
High employment likely means that the Federal Reserve won’t be under as much pressure to lower interest rates, even if inflation decreases. This is usually bad news for growth stocks, which tend to thrive in a low-interest rate environment. Still, the prospect of a robust economy and stronger-than-expected economic growth was enough to boost sentiment.
You May Also Like
Ethereum price enters a low-risk phase as open interest falls 50% since August
IP Hits $11.75, HYPE Climbs to $55, BlockDAG Surpasses Both with $407M Presale Surge!
