03/05/2024 – 17:30
The New York stock exchanges closed sharply higher this Friday, 3rd, after the slowdown in the job market and the services sector in the United States consolidated the bet that the Federal Reserve (Fed, the North American central bank) will cut interest this year.
The Dow Jones index ended the session with an increase of 1.18%, at 38,675.68 points; the S&P 500 advanced 1.26%, to 5,127.79 points; and the Nasdaq rose 1.99%, to 16,156.33 points. During the week, there were gains of 1.14%, 0.55% and 1.43%, respectively.
Most notably, Apple’s stock jumped 5.97%, after the iPhone maker reported better-than-expected revenue and expanded share buybacks to a record level. In the wake, Nvidia rose 3.46% and Microsoft, 2.25%.
The movement was amplified by the relief in Treasury interest rates, following a series of data in the USA. The payroll showed the creation of 175 thousand jobs in April, below expectations, while the increase in wages slowed down.
The same month saw a cooling in services activity, as indicated by two purchasing managers’ index (PMI) readings.
After the indicators, the future curve confirmed the pricing for the Fed’s interest rate cut from September, as suggested by CME Group monitoring. Investors also once again saw a scenario of an accumulated reduction of 50 basis points in 2024 as more likely.
For economist Thomas Simons, from Jefferies, the Fed leadership will be relieved by the most recent payroll, but there is still insufficient information to support an imminent interest rate cut. “We maintain our forecast for just one rate cut later this year, in November or December,” he says.
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