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Stocks hit record, US dollar strengthens after jobs data

The dollar rose after the U.S. payrolls data was stronger than expected, which indicated that the labor market might not be degrading as rapidly.

The Labor

Department

Nonfarm payrolls increased 147,000 jobs in June, after a 144,000 increase in May that was revised upwards. This is well above the 110,000 estimates of economists polled.

Markets dialed

Back expectations

According to LSEG, the Federal Reserve is expected to cut rates this year in response to the new data. The nearly 25% chance of a rate cut has all but disappeared, and expectations for a reduction in September are now down to 75%, from nearly 98% just before the report was released.

"July Cut is off the table." "I was as surprised as everyone else to receive such a high number," said Sandy Villere.

I'm not going say Goldilocks but it is pretty amazing, given all the intercurrents from DOGE to tariffs. It's pretty amazing that you can cut when the labor market is this strong.

Wall Street closed again at record highs, with the S&P 500 index and Nasdaq composite index both reaching new records. Technology shares Nvidia rose by 1.3%, as its market capitalization approached $4 trillion.

The Institute for Supply Management (ISM), another economic institute, showed that the U.S. service sector was booming.

Pick up the pace

In June, employment decreased for the third consecutive month as orders recovered.

The Dow Jones Industrial Average climbed 344.11, or 0.7%, to 44.828.53, while the S&P 500 jumped 51.93, or 0.8%, to 6,279.35, and the Nasdaq Composite grew 207.97, or 1.02, points to 20,601.10. The S&P 500 rose by 1.72% for the week. The Nasdaq gained 1.62% and the Dow rose 2.3%. MSCI's global stock index rose by 5.99 points or 0.65% to 926.47, after reaching a record high of 926.79. It was also up 0.3% for the week. The pan-European STOXX 600 closed the week up 0.47% led by bank stocks.

Dollars strengthened

In the wake of payrolls, the dollar index, which measures greenbacks against a basket currencies, rose 0.38% to reach 97.12. The euro fell 0.37%, at $1.1754. The dollar is on course for its second consecutive gain, after nine sessions of declines. It was down by 0.1% this week. The dollar gained 0.95% against the Japanese yen to reach 145.03. Hajime Takata, a Bank of Japan board of member, said that the central banks should resume interest rates hikes after a temporary pause in order to evaluate the effect of U.S. Tariffs. He expressed optimism that the country is on track to achieve its central bank's goal of price stability.

The sterling strengthened by 0.07%, to $1.3645. This follows a sharp drop in UK assets the previous session due to fiscal concerns and uncertainties about Rachel Reeves future as Britain's Finance Minister.

U.S. Treasury

yields jumped

After the jobs report, we will ease a bit. The yield on the benchmark 10-year U.S. notes increased 5.3 basis point to 4.346%, while the yield on the 2-year note, which moves typically in line with expectations of interest rates for the Federal Reserve rose 9.7 basis points, to 3.886%.

The 10-year yield increased by 6.3 basis point while the 2-year rate rose nearly 14.6 basis points.

U.S. crude dropped 0.65% to $67.01 per barrel. Brent was down to $68.79 a barrel, a drop of 0.46% for the day.

(source: Reuters)