U.S. stocks trudged higher on Friday as the S&P 500 and Nasdaq Composite attempted to snap a three-day losing streak while investors parsed the July jobs report from the Department of Labor along with Big Tech earnings from Amazon and Apple.
What’s driving markets
- The Dow Jones Industrial Average DJIA rose 176 points, or 0.5%, to 35,392.
- The S&P 500 SPX gained 22 points, or 0.5%, to 4,525.
- The Nasdaq Composite COMP advanced 97 points, or 0.7%, to 14,055.
The S&P and Nasdaq both have declined for three straight trading days through Thursday’s session. And all three major indexes quoted above were on track to book a weekly loss to kick off August.
What’s driving markets
Friday’s July jobs report offered up what many analysts described as a mixed bag for the stock market, with the pace of job creation slowing while wage growth remained robust.
Data showed 187,000 new positions were created last month, the slowest pace since December 2020. Numbers for June and May were also revised lower by a combined 49,000. At the same time, the unemployment rate dropped to 3.5%.
Slowing job growth bolstered expectations that the Federal Reserve’s interest-rate hikes are having their intended effect and that the central bank might succeed in cooling the U.S. economy — and inflation with it — without crashing it.
However, many economists and analysts flagged the hotter-than-expected wage growth represented by the average hourly earnings number, which came in at 0.4% in July, as a potential sticking point for the Fed.
That’s equivalent to an annualized pace of 4.4%, according to Bankrate senior economic analyst Mark Hamrick, well above the Fed’s target of 2% inflation.
Callie Cox, U.S. equity analyst at eToro, said the jobs report was cause for cautious optimism for stocks, but that investors could easily change their minds and send the market lower.
“This jobs report is one to celebrate, but it may not be enough to ease the market’s concerns about the future. It’ll be interesting to see which narrative investors fixate on — slower hiring, or concerningly high wage growth,” she said in emailed commentary shared with MarketWatch.
Meanwhile, Steve Sosnick, chief strategist at Interactive Brokers, said the data likely wouldn’t have a meaningful impact on the Fed’s plans.
“There’s been some slowing but you’re not going to hear a rhetorical change from the Fed,” Sosnick said during an interview with MarketWatch.
Instead of focusing on the data, investors were likely looking through it to focus on Big Tech earnings from Apple and Amazon released after the close on Thursday while they continued to await next week’s inflation report. The consumer-price index for July is due out Thursday.
Treasury yields declined after the jobs data, which also helped ease the pressure on stocks. The yield on the 10-year BX:TMUBMUSD10Y was off by 10 basis points at 4.082%. Rising yields, particularly on the long end of the Treasury curve, have been blamed for the selloff in stocks earlier this week. Bond yields move inversely to prices.
The U.S. dollar appeared to follow Treasury yields lower, with the ICE U.S. Dollar Index DXY falling 0.7% to 101.88, adding another tailwind to stocks.
Companies in focus
- Apple Inc. AAPL, -3.09% shares fell after the consumer-technology behemoth reported a third-straight quarter of declining sales.
- Amazon.com Inc. AMZN, +10.55% shares advanced after the company reported quarterly profit that beat expectations.
- Icahn Enterprises L.P. IEP, -22.74% shares plunged after the company said it’s cuttings its quarterly distribution to $1 from $2.
- Tupperware Brands Corp. TUP, +41.90% saw another huge pop on Friday after announcing a debt-restructuring agreement late Thursday.
- Shares of Nikola Corp. NKLA, -11.19% fell Friday after the electric-vehicle maker beat Wall Street expectations for second-quarter losses and revenue, but slashed its full-year outlook.