US stocks waver after jobs report smashes expectations

The US stock market had a wild session on Friday, falling at first as the Federal Reserve’s intentions to lower interest rates this year were called into question by a better-than-expected jobs report. Investors had been waiting for news that would suggest the economy was slowing down and would result in rate cuts. Nonetheless, the May jobs data showed a strong increase in employment of 272,000, above the projected 185,000.

Mixed Interpretations

Different economists had different views of the US jobs report. The strong payroll growth was seen by optimists as evidence of ongoing economic growth. On the other hand, the rise in part-time work and the unemployment rate reaching 4%—the highest level since early 2022—were the main points of concern for the pessimists.

Impact on Rate Cut Expectations

The strong job data probably delays the chance of an early rate reduction by the Federal Reserve. But if core inflation stays low, some economists think the Fed would still take a look at cutting rates by a quarter point in September.

Market Reaction

Following the release of the NFP report, the Dow Jones Industrial Average and S&P 500 had some immediate declines, but by the afternoon, they had somewhat recovered. The Nasdaq, which is heavily weighted in technology, did worse, closing the day down.

Other Market News

GameStop shares plunged after the company reported disappointing quarterly results and announced a stock sale. Robinhood remained a bright spot, with its stock price up 27% in the last 30 days and its recent acquisition of crypto exchange Bitstamp being viewed as a strategic move.