Today’s stock market: Wall Street ends mixed amid moderate jobs report

Wall Street ended mixed on Friday as the latest employment data pointed to a steady U.S. job market capable of bolstering the economy without significantly inflating prices.

The S&P 500 fell by 12.64 points or 0.3%, settling at 4,398.95, even though the majority of stocks within the index appreciated. The Dow Jones Industrial Average lost 187.38 points, or 0.6%, closing at 33,734.88, and the Nasdaq composite slightly declined by 18.33 points, or 0.1%, ending at 13,660.72.

The economy’s ability to continue to grow amidst the Federal Reserve’s inflation-curbing interest rates is under close scrutiny. The goal is to foster growth without inducing the Fed to apply tighter brakes to prevent runaway inflation.

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The jobs report for June indicated that U.S. employers added 209,000 jobs, less than May’s 306,000 but in line with economic forecasts. This contrasted with Thursday’s report which suggested an unexpected hiring surge, leading to a market decline.

In addition to the hiring slowdown, there were signs of some easing in the job market. For instance, more people are working part-time as their hours have been reduced, according to Brian Jacobsen, chief economist at Annex Wealth Management.

“The job market is in good health, for now, but it’s not on fire,” Jacobsen noted.

This might cause the Federal Reserve to stick to its hinted plan: possibly two more rate hikes this year before freezing the rates to ensure inflation returns to its 2% target. Wall Street widely anticipates a rate hike at the Fed’s meeting in three weeks.

Post-jobs report, the Treasury yields presented a mixed picture. The 10-year Treasury yield increased slightly to 4.05% from 4.03% the previous day. This yield significantly influences mortgages and other critical loans.

The two-year yield, closely linked to Fed’s expectations, dropped to 4.94% from 5.00%.

The report still had underlying signs of potential inflation.

Last month’s wage growth remained stable, contrary to expectations of a slowdown. While a 4.4% increase in average hourly earnings over last year is preferred by workers to the anticipated 4.2%, it could be seen by the Fed as a factor pressuring inflation upwards.

Yields are currently around their highest since March, a time when high rates led to three U.S. banking system failures and impacted confidence in financial markets. High rates have also adversely affected sectors like manufacturing and housing.

On Friday, energy stocks were among the best performers on Wall Street due to the oil price rally. Schlumberger, Halliburton, and Marathon Oil saw gains of 8.6%, 7.8%, and 4.3%, respectively.

Solar company stocks also rose, further helped by First Solar’s announcement of a $1 billion credit facility for expansions, resulting in a 3.3% increase in its shares.

Smaller companies, viewed as more reliant on lower interest rates and more in sync with the U.S. economy, outperformed the broader market. The Russell 2000 index of these smaller stocks gained 1.2%.

However, Levi Strauss saw its stocks fall by 7.7% despite better-than-expected quarterly profits. A revised lower full-year earnings forecast due to pressure on its U.S. wholesale business was the cause. Meanwhile, Costco Wholesale reported a sales growth slowdown in June compared to May, leading to a 2.3% decline in its stocks.

With higher yields pulling it down, the S&P 500 saw a 1.2% loss over the week, marking its second weekly loss in the past eight weeks.

Overseas, Chinese indexes continued their slump as recovery from the lifting of COVID-19 restrictions is slower than anticipated. Hong Kong’s Hang Seng and Shanghai stocks dropped by 0.9% and 0.3%, respectively.

U.S. Treasury Secretary Janet Yellen was in Beijing to address economic tensions between the world’s two largest economies. Along with Chinese Premier Li Qiang, she expressed the desire for improved communication, amidst U.S. government’s restrictions on technology exports to China and other disputes.

In Europe, markets showed a mixed response. Germany’s DAX gained 0.5%, while the FTSE 100 in London declined 0.3%.

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Contributions made by AP Business Writers Matt Ott and Elaine Kurtenbach.

Frequently Asked Questions (FAQs) about U.S. Jobs Report

More about U.S. Jobs Report

• Understanding the U.S. Jobs Report
• What the Federal Reserve Does and Why Its Decisions Matter
• The Impact of Treasury Yields on the Economy
• How Inflation Works and Affects the Economy
• Overview of the Stock Market
• China’s Economic Outlook
• Current Status of European Stock Markets