Investors welcomed softer labor market data, fueling hopes the Federal Reserve will avoid another interest-rate hike.
U.S. stocks opened higher Thursday after a weaker-than-expected June employment report reinforced investor expectations that the Federal Reserve may keep interest rates unchanged for longer, easing concerns about additional monetary tightening.
The Dow Jones Industrial Average gained about 294 points, or 0.56%, shortly after the opening bell, while the S&P 500 rose 0.49% and the Nasdaq Composite advanced 0.35%.
According to the U.S. Bureau of Labor Statistics (BLS), the unemployment rate edged down to 4.2% in June from 4.3% in May. However, the economy added just 57,000 jobs, well below economists’ expectations and less than half the pace many analysts had forecast.
While slower hiring may signal moderating economic growth, investors viewed the report as reducing the likelihood that the Federal Reserve will raise interest rates in the near term. The softer labor market data could also ease inflationary pressures, giving policymakers more flexibility in upcoming meetings.
The report follows the Fed’s recent decision to leave its benchmark interest rate unchanged in a range of 3.5% to 3.75%, the first policy meeting chaired by Kevin Warsh, who was nominated by President Donald Trump.
Technology shares also recovered after losses in the previous trading session. Nvidia rose 0.13%, Micron Technology gained 1%, and Qualcomm added 0.46% in early trading.
In commodities markets, gold climbed 1.48% to approximately $4,142 per ounce, while silver jumped 2.57% to $62.06 per ounce. Meanwhile, the yield on the benchmark 10-year U.S. Treasury note slipped to 4.482%, reflecting increased demand for government bonds following the employment data.
The June jobs report is likely to remain a focal point for investors as markets continue assessing the outlook for economic growth, inflation and future Federal Reserve policy.
