The S&P 500 Index ($SPX) (SPY) closed up +0.62% on Friday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.28%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +1.19%. September E-mini S&P futures (ESU26) rose +0.55%, and September E-mini Nasdaq futures (NQU26) rose +1.17%.
Stock indices settled higher on Friday amid strength in corporate earnings results and reduced Fed rate hike fears. Stock indices found support on Friday as bond yields fell after US July nonfarm payrolls unexpectedly declined and average hourly earnings rose less than expected, bolstering speculation that the Fed won’t be forced to raise interest rates any time soon. The 10-year T-note yield fell -3 bp to 4.65%. The payroll report cut the chances of a Fed rate hike at next month’s FOMC meeting to 44% from 58% before the report.
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Atlassian surged more than +36% to lead software stocks higher today after forecasting stronger-than-expected Q1 revenue. Cybersecurity stocks also rallied on Friday, led by a 4% jump in Cloudflare after it reported better-than-expected quarterly earnings. In addition, chipmakers received support on Friday as Microchip Technology rallied more than +13% after forecasting stronger-than-expected net sales for next quarter.
US July nonfarm payrolls unexpectedly fell by -23,000, weaker than expectations of an +80,000 increase and the first decline in 5 months. June payrolls were revised downward to show a +20,000 increase from the previously reported +57,000. The July unemployment rate unexpectedly fell -0.1 to a 13-month low of 4.1%, showing a stronger labor market than expectations of no change at 4.2%.
US July average hourly earnings rose +0.1% m/m and +3.2% y/y, weaker than expectations of +0.3% m/m and +3.5% y/y.
US June consumer credit rose $14.173 billion, stronger than expectations of $11.850 billion.
Thursday evening, St. Louis Fed President Alberto Musalem said policymakers cannot afford to tolerate higher inflation and…
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