US Stocks Gain As Rate Cut Hopes Fade After Jobs Data/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks climbed further into record territory Thursday after a strong jobs report eased recession fears. Bond yields spiked as traders slashed bets on a July interest rate cut from the Federal Reserve. Meanwhile, Trump’s looming tariffs continue to add uncertainty to the outlook.
Quick Look
- S&P 500 up 0.5%, on track for record.
- US economy adds 147,000 jobs in June.
- Unemployment benefits claims fell last week.
- Bond yields jump as Fed rate cuts seen unlikely.
- Trump’s tariffs could still spark inflation fears.
- Fed signals caution on cutting rates too soon.
- Datadog stock surges on S&P 500 inclusion.
- Global markets mixed; Kospi gains, Hang Seng slips.
US Stocks Edge Higher, Bond Yields Surge as Wall Street Sees Slim Chances for July Rate Cut
Deep Look
NEW YORK (AP) — U.S. stocks nudged further into record territory on Thursday after a stronger-than-expected jobs report underscored the resilience of the labor market, despite lingering concerns over President Donald Trump’s trade policies.
The S&P 500 rose 0.5% in early trading, positioning itself for its fourth record close in five days. The Dow Jones Industrial Average added 133 points, or 0.3%, while the Nasdaq composite climbed 0.6% as of 9:35 a.m. Eastern time.
However, the more dramatic market moves came in the bond market. The Labor Department reported U.S. employers added 147,000 jobs in June, exceeding forecasts and signaling continued economic strength.
“There is nothing to complain about here,” said Carl Weinberg, chief economist at High Frequency Economics. “You cannot find any evidence of a nascent recession in these figures.”
A separate report showed fewer Americans filed for unemployment benefits last week, another sign that layoffs remain low.
Bond yields leapt as traders bet the Federal Reserve would likely hold off on cutting interest rates this month, despite Trump’s repeated calls for looser monetary policy. Higher interest rates tend to weigh on stock prices and make borrowing more expensive for consumers and businesses.
Futures markets are now pricing in less than a 5% chance that the Fed will cut its benchmark interest rate at its upcoming meeting, down from nearly 24% just a day earlier, according to CME Group data.
Fed Chair Jerome Powell has signaled caution, emphasizing he wants to assess how Trump’s tariffs may impact inflation and growth before deciding on rate cuts. Although lower rates could help the economy, they also risk fueling inflation—especially if Trump’s import tariffs push prices higher.
Many of Trump’s proposed tariffs remain paused for now, but they’re set to go into effect next week unless trade agreements are reached.
In response to the jobs data, the yield on the 10-year Treasury climbed to 4.33% from 4.30% late Wednesday. The two-year Treasury yield, more sensitive to Fed policy expectations, jumped to 3.87% from 3.78%.
On Wall Street, Datadog surged 9.8% after news broke that its stock would be added to the S&P 500 index before trading opens on Wednesday. Inclusion in the widely tracked index often boosts demand for a stock as many funds are benchmarked to the S&P 500. Datadog will replace Juniper Networks, which is merging with Hewlett Packard Enterprise.
Global markets also saw gains. South Korea’s Kospi rose 1.3%, while Hong Kong’s Hang Seng slipped 0.6% in more mixed trading overseas.
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