S&P 500 gains as first payroll miss in 15 months eases Fed hike worries
Investing.com — The S&P 500 rose Friday as monthly jobless claims missed expectations, stoking hopes that labor market strength may be abating and could persuade the Federal Reserve to lean less hawkish.
The S&P 500 rose 0.12%., the Dow Jones Industrial Average fell 0.18%, or 62 points, and the Nasdaq gained 0.1%.
The economy created 209,000 jobs in June, missing the 225,000 expected and a marked decrease from the 306,000 in the prior month. That marked the weakest pace of job creation since December 2020.
But average hourly earnings, or wage growth, rose 4.4% last month, topping estimates of 4.2%
While expectations for a July hike remained baked in, investors are betting that the cooling in the labor market would be enough to keep the Fed from hiking again after July.
“Today’s report supports our view that the incoming data will not meet the bar for the Fed to deliver a hike in September,” Morgan Stanley said in a note.
The 2-year Treasury yield fell below 5%, but the 10-year yield held onto gains.
Energy stocks were back in the driving seat, leading the broader market higher as expectations that a less hawkish Fed eased worries about a recession and the oil demand outlook.
Halliburton Company (NYSE:HAL), Diamondback Energy Inc (NASDAQ:FANG), and Schlumberger NV (NYSE:SLB) were among the biggest gainers with the latter up more than 8%.
Levi Strauss (NYSE:LEVI) fell more than 8% after the denim retailer cut its annual earnings guidance after reporting quarterly results that showed a beat on earnings, but in-line sales amid a dip in wholesale revenue.
The company cut its guidance on adjusted diluted EPS for 2023 to a range of $1.10 to $1.20 from $1.30 to $1.40 and said it now expects revenue of growth of between 1.5%
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