The DOW JONES fell 0.23% to 38,797 points, while the S&P 500 lost 0.31% to 5,336 points. The Nasdaq fell 0.36% to 17,111 points.
Despite today’s falls, the three major New York indices are on track to close the first week of June with a positive balance. The DOW JONES has gained a modest 0.52% through Thursday, while the S&P 500 has risen 1.43% and the Nasdaq is on track to advance 2.62%, the latter two favored by the strong pull of NVIDIA .
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Today all eyes were on the May employment report published by the Department of Labor shortly before the bell. The report shows the creation of 272,000 jobs, well above the 190,000 expected, compared to a figure of 165,000 in the previous month. The US unemployment rate rose to 4.0% from a level of 3.9%, according to the Labor Department, compared to a forecast of 3.9%.
Regarding the indicator of average hourly wages, it rose 0.4% in May. The forecast was for an increase of 0.3%. In annual rate, average hourly earnings rose 4.1%compared to the estimated 3.9%.
Investors were prepared to pore over this report for signs of a weakening labor market, as evidence of a slowing economy may support interest rate cuts by the Federal Reserve. However, “this blockbuster nonfarm payrolls report makes it harder for the Fed to move toward a rate cut”, reflects Giuseppe Sette, president of Toggle AI. “The next few months will be interesting as the Federal Reserve will have to deal with the improving performance of the US economy, which will limit its ability to follow the ECB’s lead and make cuts.”
The jobs report comes after the European Central Bank (ECB) yesterday cut rates in the eurozone for the first time since 2019, increasing pressure on the Federal Reserve to also ease its monetary policy.
The Fed will announce its rate decision next week after its June 11-12 policy meeting. Fed funds futures trading data suggests the central bank will most likely keep rates steady this time, but implies a roughly 53% chance that policymakers will ease their policies in September, according to the CME FedWatch tool. Before the report, the chances were over 70%.
In fixed income, always very sensitive to changes in monetary policy, The yield on the ten-year US bond rises 14 points to 4.42%, although it is still far from the 4.6% reached last week. The two-year bond offers a yield of 4.746%.
In the business sphere, eyes continue to focus on NVIDIA, which today after the close of regular trading will make its stock split effective in a ratio of 10 to 1. This movement, which can facilitate investment in the company for retailers as well such as the payment of bonuses to employees, it can open the door to the Dow Jones in the medium term.
Among the companies to release results, GameStop posted net sales of $881.8 million during the period. That’s down 29% from $1.237 billion a year earlier. Analyst estimates ranged from $900 million to $1.09 billion. The company lost $32.3 million during the quarter, a smaller loss than the $50.5 million suffered in the prior-year period.
These accounts appear to have discouraged investors. GameStop shares had risen more than 30% in anticipation of a live broadcast on YouTube scheduled by “Roaring Kitty”, but they have turned around to plummet 19%.
DocuSign falls almost 8% after the bell despite slightly beating market expectations. The company reported first-quarter adjusted earnings of 82 cents per share and revenue of $710 million. Analysts had expected 79 cents per share in earnings and revenue of $707 million. DocuSign has also authorized an increase to its $1 billion share buyback.
Tour operator Vail Resorts posted fiscal third-quarter earnings of $9.54 per share on revenue of $1.28 billion. Those results missed analyst expectations of $9.97 earnings per share on revenue of $1.3 billion. Its shares fell 8.5% in the New York morning.
Shares of ride-sharing company Lyft rise more than 3% at the open. Several research houses have upgraded their recommendations on the stock to ‘buy’ after Lyft’s Investor Day on Thursday. The company expects a compound annual growth rate of gross bookings of approximately 15% between 2024 and 2027.
In commodity markets, oil prices are stabilizing after OPEC+ members such as Saudi Arabia and Russia have indicated they are willing to pause or reverse oil production increases. However, crude oil is still headed for its third straight weekly loss on demand concerns.
European benchmark Brent crude futures rose 0.03% to $79.90 a barrel, while U.S. West Texas Intermediate crude futures rose 0.19% to $75.69.
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