Weak ADP Jobs Report Lifts Fed Rate-Cut Odds; S&P 500 Rises
Payroll processor ADP's monthly jobs report that net hiring in May was the weakest in over two years. Federal Reserve rate-cut odds ticked higher, though markets still don't expect an easing until the September meeting. The S&P 500 opened slightly higher in early Wednesday stock market action.
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The Hill
11 minutes ago
- The Hill
Wall Street gains ground following a solid jobs report
NEW YORK (AP) — Stocks rose on Wall Street Friday following a better-than-expected report on the U.S. job market. The S&P 500 index rose 0.9% in afternoon trading. The benchmark index remains on track to notch a second consecutive winning week. The Dow Jones Industrial Average added 344 points, or 0.8% as of 1:22 p.m. Eastern. The Nasdaq composite rose 1.2% The gains were broad, with nearly every sector in the benchmark S&P 500 rising. Technology stocks, with their outsized values, gave the market its biggest boost. Chipmaker Nvidia jumped 1.6% and iPhone maker Apple rose 1.4%. Tesla rose 5.5%, regaining some the big losses it suffered on Thursday when Trump and Musk sparred feverishly on social media. Circle Internet Group, the U.S.-based issuer of one of the most popular cryptocurrencies, rose 43%. That adds to its 38.7% gain from Thursday when it debuted on the New York Stock Exchange at $60 per share. U.S. employers slowed their hiring last month, but still added a solid 139,000 jobs amid uncertainty over President Donald Trump's trade war. The closely-watched monthly update reaffirmed that the job market remains resilient, despite worries from businesses and consumers about the impact of tariffs on goods going to and coming from the U.S. and its most important trading partners. 'It looks like, for now, everything is kind of running smoothly,' said Chris Zaccarelli, chief investment officer for Northlight Asset Management. 'Investors see that as a positive, but we also haven't seen the full effect of tariffs yet.' President Donald Trump's on-again-off-again tariffs continue to weigh on companies. Lululemon Athletica plunged 20.2% after the maker of yoga clothing cut its profit expectations late Thursday as it tries to offset the impact of tariffs while being buffeted by competition from start-up brands. Lululemon joins a wide range of companies, from retailers to airlines, who have warned investors about the potential hit to their revenue and profits because of tariffs raising costs and consumers potentially tightening their spending. Hopes that Trump will lower his tariffs after reaching trade deals with other countries have been among the main reasons the S&P 500 has rallied back so furiously since dropping roughly 20% from its record two months ago. It's now back within 2.5% of its all-time high. The economy is already absorbing the impact from tariffs on a wide range of goods from key trading partners, along with raw materials such as steel. Heavier tariffs could hit businesses and consumers in the coming months. The U.S. economy contracted during the first quarter. Recent surveys by the Institute for Supply Management, a trade group of purchasing managers, found that both American manufacturing and services businesses contracted last month. On Tuesday, the Organization for Economic Cooperation and Development forecast 1.6% growth for the U.S. economy this year, down from 2.8% last year. The uncertainty over tariffs and their economic impact has put the Federal Reserve in a delicate position. 'All things being equal, you can clearly see they are on hold,' Zaccarelli said. The central bank is holding its benchmark interest rate steady as it worries about tariffs reigniting inflation. It fought hard, using interest rate increases, to ease inflation rates back toward its target of 2% and rates have been hovering just above that level. The Fed has been hesitant to cut interest rates in 2025 after trimming rates three times late last year. While lower interest rates can give the economy a boost, they can also push inflation higher. That could be especially damaging if import taxes are also raising costs for businesses and consumers. Wall Street expects the central bank to hold rates steady at its June meeting, but traders are forecasting that it will have to cut interest rates later this year in an effort to prop up the economy. In the bond market, Treasury yields made significant gains. The yield on the 10-year Treasury rose to 4.49% from 4.39% late Thursday. The two-year Treasury yield, which more closely tracks traders' expectations for what the Federal Reserve will do with overnight interest rates, rose to 4.04% from 3.92% late Thursday. Markets in Asia were mixed and markets in Europe were were mostly higher. ___ AP writers Elaine Kurtenbach and Matt Ott contributed to this report.
CNET
an hour ago
- CNET
Mortgage Rate Predictions for June: Can Rates Fall Without Fed Cuts?
Mortgage rates can change daily and even hourly. Tharon Green/CNET Forecasts for the housing market haven't changed much, with stubbornly high mortgage rates keeping prospective homebuyers on the sidelines. After the average rate for a 30-year fixed mortgage inched past 7% last week, it's moving back down, but not by much. Meanwhile, Friday's release of labor data showed the unemployment rate maintaining a status quo at 4.2%, which likely won't cause enough alarm for the Federal Reserve to reduce interest rates at its upcoming policy meeting on June 17-18. As I've pointed out in the past, a slowing job market would make it more likely for the central bank to lower borrowing costs. But even though official labor data appears stable, experts warn the worst is yet to come. Jobless claims and layoffs are increasing, signaling employer caution amid trade wars and ballooning government debt. The Fed is facing a challenging balancing act between keeping inflation in check and keeping unemployment low. Inflation is expected to go up as domestic companies pass expensive duties onto consumers in the form of higher retail prices. "As long as the tariffs remain high, there will be a worry about persistently high inflation that the Fed cannot ignore," said Chen Zhao, Redfin's head of economic research. Most experts say the housing market is unlikely to change significantly in the coming months. With no clear consensus on what's next for the economy or fiscal policy, mortgage rates have been in a holding pattern. Prospective homebuyers should expect rates to remain near 6.8% for the remainder of 2025, according to Redfin's forecast. How would the Fed impact mortgage rates? Following signs of cooler inflation, the Fed cut interest rates three times in 2024, making borrowing costs slightly less restrictive. However, the Fed has held rates steady since then, waiting to see the long-term implications of the president's policies before it lowers rates again. The Fed's actions don't immediately dictate mortgage rates, but they indirectly influence how much it costs to borrow money across the economy. Financial markets don't expect interest rate cuts until September at the earliest. "There's way too much uncertainty as to what becomes of the tariffs, inflation and the broader economy," said Keith Gumbinger, vice president at "There may be no cut at all if conditions don't support it." Fewer interest rate cuts combined with the administration's budget bill, which is expected to significantly raise deficits, are likely to keep upward pressure on longer-term bond yields. The 30-year mortgage rate closely tracks the 10-year Treasury yield, so rising bond yields translate to higher rates for home loans. On the other hand, if the unemployment rate starts to climb due to the recent wave of layoffs, the central bank might consider easing policy to avert a deeper downturn. That would put downward pressure on Treasury bond yields and mortgage rates. Could a recession result in lower mortgage rates? In order for mortgage rates to drop significantly, the overall economic picture would have to get a lot bleaker, which isn't great for those struggling to afford a home. "The situation could change quickly if there are new announcements out of the Trump administration or if global economic conditions weaken," said Lisa Sturtevant, chief economist at Bright MLS. A recession isn't a foregone conclusion, though it's still a possibility. Joblessness is on the rise, consumer spending has slowed and economic growth declined in the first quarter of 2025. The prospect of a slowdown is weighing heavy on consumer confidence. Stagflation, an economic downturn marked by high inflation, is also a threat. If lower mortgage interest rates are a by-product of a recession, buyers who are worried about job security and affording the high cost of living will be hesitant to take on mortgage debt. "When people are anxious, they are less likely to make big decisions, like buying and selling a home," Sturtevant said. What do housing market experts recommend? In today's unaffordable housing market, prospective buyers have multiple reasons to postpone plans for homeownership. High mortgage rates and growing unease about economic instability have kept overall activity low. "Given so many unknowns, it is a good time for caution. But if the market presents a potential homebuyer with a house they love and can afford, there's little reason not to take advantage of the opportunity," said Gumbinger. Homeownership offers the promise of long-term financial stability and generational wealth-building through equity. If you're waiting for mortgage rates to come down before buying, keep in mind that the large-scale economic issues affecting the housing market are beyond your control. Instead, you can focus on the ways to bring down your individual mortgage rate, said Hannah Jones, senior research analyst at For example, shopping around for lenders can save borrowers up to 1.5% on their mortgage rate. Since each lender offers different rates and terms, you can always negotiate a better rate. If you're financially ready to buy, you can always refinance your mortgage down the road. Jones said other strategies for lowering your mortgage rate include improving your credit score, making a larger down payment or choosing a more affordable home. Experts recommend making a homebuying budget and sticking to it. Creating a realistic financial plan can help you decide if you can handle the costs of homeownership and provide you with some guidance for how large your mortgage should be. Watch this: 6 Ways to Reduce Your Mortgage Interest Rate by 1% or More 02:31 More on today's housing market
Yahoo
an hour ago
- Yahoo
Stock Market Today: Market higher after jobs numbers; Tesla recoups a bit
Stock Market Today: Market higher after jobs numbers; Tesla recoups a bit originally appeared on TheStreet. In the first hour of trading stocks are sharply higher. At last check the Dow 30 were up 1.1%, the S&P 500 added 1.02%, the Nasdaq Composite tacked on 1.19% and the Russell 2000 moved up 1.23%. The stronger-than-expected jobs numbers are prompting the market move. The S&P has ticked up past 6000 for the first time since late February. Tesla shares rebounded a bit, 4.2% at last check, from the drubbing they took yesterday as the schism between CEO Elon Musk and President Donald Trump burst wider. Yesterday, the big news was that Best Buddies Elon Musk and President Trump had broken up. That sent markets into a topsy-turvy tailspin, knocking 14% off of Tesla's () share price. People seem surprised? But today is a new day and Trump and Musk are, or are not, scheduled to have a phone call following a cooling-off period overnight. Time will tell. The big news today is jobs! And the news is good for workers. The U.S. Bureau of Labor Statistics reported this morning that payroll employment increased by 139,000 in May, leaving the unemployment rate unchanged at 4.2%. This was better than expected, though it does show some softening over prior months' growth. Investors are cheering the news, with stock market futures rallying before the market open. S&P 500 futures are now up nearly 0.8% from yesterday's close and 0.4% since the release of this data. Gold and crude oil are both higher this morning, although each had a different reaction to the U.S. economic news. Crude oil rallied on economic strength, while gold initially spiked lower, then recouped. Do you know what's not doing as well? The bond market. U.S. treasuries are lower across the curve, sending yields, which move in the opposite direction of prices, higher. Why are investors selling bonds if the news was so good? The president and others have been calling for the Federal Reserve to lower interest rates. A strong economy suggests that those cuts may not be needed. Chairman Jerome Powell may choose to stay the course and any rate cuts could be pushed out toward year-end. Which stocks should you be watching today? Over on TheStreet Pro, Sarge Guilfoyle reports that Lululemon () and DocuSign () are getting pounded after their earnings reports highlighted poor guidance. Broadcom () provided stronger-than-expected guidance but is now trading around 3% lower. Here's a chart of Broadcom for the past five trading days, including after-hours action, shown in grey. Stock Market Today: Market higher after jobs numbers; Tesla recoups a bit first appeared on TheStreet on Jun 6, 2025 This story was originally reported by TheStreet on Jun 6, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
