Stocks Reclaim Record Highs As Jobs Data Fuels Growth Optimism; Gold, Bonds Tumble As Yields Rise: What's Driving Markets Friday?

Author: Piero Cingari | June 07, 2024 01:54pm

Wall Street returned to reclaim record highs on Friday after a stronger-than-expected jobs report.

In May, the increase in non-farm payrolls rose by 272,000 units, a jump from 165,000 and significantly higher than the economists’ consensus of 180,000. Hourly wages also surprised on the upside (4.1% year-on-year versus 3.9%), while unemployment came in slightly higher than expected (4% vs. 3.9%).

The hotter-than-expected labor market data sparked a reassessment in rate-cut hopes, with traders closing the door on a July cut, lowering bets on September and currently expecting only one cut by year-end.

The move in rate expectations triggered sharp increases in bond yields, with Treasuries witnessing about a 10-basis-point rise in yields across maturities. This lead to sharp drops in fixed-income markets, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) down 1.8%.

Investors opted to look at the brighter side of the jobs report, as a stronger job market means a resilient economy, pushing back fears of a slowdown and thus reigniting the risk-assets rally.

Both the S&P 500 and the Nasdaq 100 index reached fresh all-time highs during the session. Blue chips were flat, while small caps tumbled 0.8%.

The U.S. dollar index (DXY), as tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), rallied 0.8%, eyeing its strongest session since late April.

The rising greenback generated heavy bearish pressure on commodities, with gold down 2.6% and silver plummeting nearly 6% on its worst day since February 2021. Bitcoin (CRYPTO: BTC) was flat at $70,880.

Friday’s Performance On Major US Indices, ETFs

Major Indices	Price	1-day %chg
Nasdaq 100	19,083.89	0.3%
S&P 500	5,368.01	0.3%
Dow Jones	38,934.67	0.1%
Russell 2000	2,032.91	-0.8%

According to Benzinga Pro data:

The SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.3% higher to $536.27.
The SPDR Dow Jones Industrial Average (NYSE:DIA) was 0.2% up to $390.22.
The tech-heavy Invesco QQQ Trust (ARCA: QQQ) rose 0.4% to $465.35.
Sector-wise, the Financials Staples Select Sector SPDR Fund (NYSE:XLF) outperformed, up by 0.8%, while the Materials Select Sector SPDR Fund (NYSE:XLB) lagged, down 0.8%.

Friday’s Stock Movers

GameStop Corp. (NYSE:GME) plummeted over 30% after missing quarterly results. The meme stock failed to rally minutes after Keith Gill — alias the “Roaring Kitty” — started his YouTube livestream.
AMC Entertainment Holdings Inc. (NYSE:AMC) fell nearly 15%.
Mining-related stocks fell heavily with Newmont Corp. (NYSE:NEM), Agnico Eagle Mines Limited (NYSE:AEM) and Freeport-McMoRan Inc. (NYSE:FCX) tumbling 5%, 6.9% and 4.5%, respectively.
Stocks reacting to earnings included Vail Resorts Inc. (NYSE:MTN), down 12%, Samsara Inc. (NYSE:IOT), down 13%, DocuSign Inc. (NASDAQ:DOCU), down 5% and Braze Inc. (NASDAQ:BRZE) up 2%.