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U.S. stocks on Friday ticked higher, while Treasurys rallied. The moves came after the latest nonfarm payrolls report showed cooling jobs and a tick up in unemployment, prompting investors to up their bets for Federal Reserve interest rate cuts.
The S&P 500 (SP500) and the Nasdaq Composite (COMP:IND) notched new all-time highs. Approaching midday, the former was last +0.3% while the latter was +0.7%. The Dow (DJI) was just above the flat line.
The 10-year Treasury yield (US10Y) was down 6 basis points to 4.47%. The 2-year yield (US2Y) was down 11 basis points to 4.62%. See how Treasury yields have done across the curve at the Seeking Alpha bond page.
U.S. markets were closed yesterday on account of the U.S. Independence Day.
Traders also watched as 14 years of Conservative rule ended in the U.K. after the Labour Party won the general election by a landslide, with Keir Starmer becoming the new prime minister.
U.S. nonfarm payrolls rose by 206K in June, surpassing the 191K consensus and a slower pace than the 218K notched in May, which was revised down from 272K, the U.S. Department of Labor said on Friday.
"-111K net revision and only 136K private new jobs in June. This is a soft report," Pantheon Macro's Ian Shepherdson said on X (formerly Twitter).
The unemployment rate ticked up to 4.1% in June, vs. 4.0% expected, from 4.05% in the previous month.
"The 0.1pp increase in unemployment in June is not statistically significant. But the 0.31pp increase over the past six months is. The labor market is slowing," Shepherdson added.
The Federal Reserve's balance sheet is also due later in the day today.