Stocks Rebound, Dollar Tumbles As June Jobs Data Eases Fed Hike Wagers: What's Driving Markets Friday?

The stock market saw fresh buyers following the strong volatile session on Thursday as lower-than-expected nonfarm payrolls in June eased some of the pressure for two Fed rate hikes this year.

The U.S. economy added 209,000 jobs last month, falling short of expectations of 225,000, and down from 306,000 in May, but the unemployment rate fell to 3.6% and annual wage growth was 4.6%, topping expectations.

Traders estimate a 92% chance of a 25-basis-point increase in the fed funds rate this month, but the chances of another quarter-point increase by November have dropped from 40% to 34%.

Cues From Friday’s Trading:

All U.S. major averages flipped to the green after experiencing losses on Thursday. The S&P 500 gained 0.3%, while the tech-heavy Nasdaq 100 rose 0.5%.

The Dow held steady for the session, while small caps in the Russell 2000 outperformed, gaining 1.6%.

US Index Performance On Friday

Analyst Color:

“The non-dovish Fed minutes, more hawkish Fed-Speak, and hot jobs data have led to rates rising towards the high of the year,” said fund manager Louis Navellier.

 He noted that bets on a July hike are now over 90%.

"After such a strong run, a pullback in stocks is not unexpected. Before the Fed’s increase in late July, we’ll see plenty of earnings which will have much more influence on third-quarter returns,” Navellier said.

Friday’s Trading In Major US Equity ETFs: In midday trading on Thursday, the SPDR S&P 500 ETF Trust SPY was 0.3% higher to $441.14, the SPDR Dow Jones Industrial Average ETF DIA held steady at $339.38 and the Invesco QQQ Trust QQQ was 0.5% higher to $369.13, according to Benzinga Pro data.

The best-performing sectors for the day were the the Energy Select Sector SPDR Fund XLE, up 2.2%, and the Materials Select Sector SPDR Fund XLB, up 1.5%.

The laggards were the Health Care Select Sector SPDR Fund XLV, down 0.8%, followed by the Consumer Staples Select Sector SPDR Fund XLP, down 0.6%.

Stocks In Focus:

• Rivian Automotive Inc. RIVN rose over 15%, on track for its eighth straight day of gains, hitting a more than six-month high as Wedbush raised the price target from $25 to $30, reflecting a better delivery outlook.
• First Solar, Inc. FSLR rose nearly 5% after obtaining a $1-billion credit line to finance factories.
• Oil stocks rallied, with Schlumberger Ltd. SLB and Halliburton Company HAL soaring 7.6% and 6.7%, respectively.
• Fortrea Holdings Inc. FTRE fell 6%, extending its weekly losses following the spin off from Laboratory Corp. of America.

Commodities, Bonds, Other Global Equity Markets:

Crude oil jumped 1.8%, with a barrel of WTI-grade crude soaring to $73. The United States Oil Fund ETF USO was 1.8% higher to $65.  

Treasury yields held steady rose, with the 10-year yield at 4.04% and the two-year yield at 4.92%. The iShares 20+ Year Treasury Bond ETF TLT was 0.4% lower for the day. 

The dollar fell, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, down 0.8%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was 0.8% higher to 1.0967.

European equity indexes closed predominantly in the green. The SPDR DJ Euro STOXX 50 Etf  FEZ rose 1.3%. 

Gold rose 1% to $1,927/oz. The SPDR Gold Trust GLD was 0.9% higher to $179. Silver rose 1.7% to $23.06, with the iShares Silver Trust SLV up 1.6% to $21. Bitcoin BTC/USD was 1.5% higher to $30,350.

Staff writer Piero Cingari updated this report midday Friday. 

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