NEW YORK MARKET CLOSE: Stocks up as week jobs print means Fed to hold

2 hours ago

(AWP Alliance News) - Shares ended higher in New York on Friday after an unexpected decline in jobs last month increased market confidence that the Federal Reserve will hold interest rates steady in August.

The Dow Jones Industrial Average rose 151.83 points, or 0.3% to 54,036.93. The S&P 500 rose 47.68 points, or 0.6%, to a record 7,757.64. The Nasdaq Composite ended up 342.26 points, or 1.3%, at 26,690.62.

For the week, the DJIA rose 3.0%, the S&P 500 climbed 3.6% and the Nasdaq jumped 5.2%.

"Friday finally gave Wall Street the kind of bad news it has been waiting for," wrote strategist Stephen Innes.

"Investors were not cheering a healthy economy. They were cheering a labour market weak enough to take the Fed's foot a little further away from the brake. Money markets still keep a 2026 hike somewhere on the board, but not before December, and that is a very different conversation from the one traders were having earlier in the week.

"The real signal is not simply the minus-23,000 print. It is the fact that the previous two months were revised materially lower as well. Taken together, the data says the labour market has lost more momentum than investors thought before lunch."

The US Bureau of Labor Statistics on Thursday said nonfarm payrolls shrunk by 23,000 in July, after rising 20,000 in June. Payrolls had been expected to rise by 80,000 last month, however, according to consensus cited by FXStreet.

The reading for June was downwardly revised from 57,000, and the May data was lowered to 63,000 from 129,000.

The bulk of the loss in July was attributed to the local government education sector, which sees thousands of teachers drop off payrolls in the summer months.

Complicating the picture, the unemployment rate unexpectedly edged down to 4.1% in July from 4.2% in June, as the labor force participation rate hit its late level since the 1970s. Annual wage growth slowed to 3.2% from 3.4%, below expectations for a 3.5% increase.

Against the dollar, the euro was at USD1.1557, up from USD1.1523. Sterling rose to USD1.3492 from USD1.3457. Against the yen, the dollar was at JPY157.76, down from JPY158.36.

The yield on the 10-year US Treasury fell to 4.64% from 4.67%, while the 30-year yield fell to 5.20% from 5.21%.

Gold jumped to USD4,339.08 an ounce from USD4,246.03 on Thursday.

Data next week includes US CPI on Wednesday, followd by the weekly initial jobless claims report on Thursday and US retail sales and consumer sentiment prints on Friday.

The week came and went without an agreement to open the Strait of Hormuz, despite White House claims of a deal close to the finish line.

Only eight ships passed through the strait on Thursday, according to data from trade intelligence provider Kpler seen by dpa on Friday. On average, around 13 ships passed through the bottleneck between the Iranian and Omani coastlines per day over the past week.

"The President's preference is always diplomacy, but he reserves all options to ensure that Iran can never possess a nuclear weapon," White House spokesperson Anna Kelly told CNBC on Friday.

"There still appears to be a fundamental difference over the fate of Hormuz: Iran wants to impose a service fee, while the US wants the pre-war situation restored, ie, international, free waters in the Strait," Rystad Energy chief economist Claudio Galimberti email the outlet.

A barrel of Brent fetched USD82.07 a barrel on Friday, down from USD83.29 on Thursday. West Texas Intermediate fell to USD76.99 from USD78.15.

On the corporate front, Airbnb shares jumped 17% on Friday on a better-than-expected second quarter boosted by the World Cup

Revenue increased 17% to USD3.61 billion from USD3.10 billion, beating Visible Alpha consensus of USD3.58 billion. Diluted earnings per share picked up to USD1.37 in the quarter ended June 30 from USD1.03 a year ago.

Nights and seats booked grew 10% to 148.3 million from 134.4 million, beating VA consensus which forecast growth of 8.4%. Gross booking value jumped 16% to USD27.2 billion from USD23.5 billion, topping expectations which forecast a 13% rise.

The football World Cup helped drive growth with more than 150,000 homes across host cities listed on Airbnb for the first time, the company said.

Take-Two on Friday rose 6.0% on better-than-expected first quarter revenue, ahead of its November launch of the latest Grand Theft Auto title.

The video game developer reported a net loss of USD34.1 million in its financial first quarter ended June 30, widening from USD11.9 million a year prior. Revenue, however, rose 2.0% to USD1.53 billion from, topping guidance. Net bookings declined 3.0% to USD1.39 billion, also ahead of guidance.

Take-Two hailed "ongoing positive trends in our business and excitement" ahead of the launch of the latest game in the GTA series on November 19. Last year, it delayed the launch of the much-anticipated game, produced by Take-Two unit Rockstar Games.

Advanced Micro Devices on Thursday revealed it has agreed to acquire Taalas Inc, a Toronto-based semiconductor company that specialises in customised artificial intelligence inference silicon.

The chipmaker said the deal strengthens its long-term AI roadmap by adding technology designed to optimise inference dataflows and reduce compute and memory bottlenecks found in general purpose architectures.

Financial details were not disclosed.

"AMD is building a full-stack AI platform that gives customers the flexibility to deploy the right compute solutions for every AI workload," said Vamsi Boppana, senior vice president of the AI Group at AMD. "Taalas' technology and world-class engineering team strengthen our AI portfolio by delivering differentiated inference performance and efficiency."

AMD closed down 1.2%.

In Europe, London's FTSE 100 rose 0.3%. The CAC 40 in Paris ended up 0.2%. The DAX 40 ended up 0.7% in Frankfurt.

In China, the Shanghai Composite closed up 1.0%. The Hang Seng rose 0.5% in Hong Kong. The Nikkei 225 in Tokyo eased 0.1%, as did the S&P/ASX 200 in Sydney.

Monday's corporate calendar has half-year results from Barrick Mining.

By Aidan Lane, Alliance News reporter

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