U.S. stocks closed higher on Friday, buoyed by a better-than-expected jobs report and renewed optimism over China trade talks. The S&P 500 surpassed the 6,000 mark for the first time since February, driven by gains in technology shares.
Key Highlights:
- Non-farm payrolls increased by 139,000 jobs in May, surpassing economist forecasts.
- The unemployment rate held steady at 4.2%, aligning with expectations.
- Tesla shares rebounded after a significant drop, while Lululemon sank after revising its profit forecast downward.
Market Reactions:
Investors reacted positively to news that U.S. officials will meet with Chinese counterparts to discuss trade, easing some of the recent tensions. However, experts caution that actual progress on a trade deal remains uncertain.
Federal Reserve Outlook:
With the labor market showing resilience, traders are betting the Fed will delay rate cuts until at least September. This sentiment was reinforced by comments from Goldman Sachs Asset Management, suggesting the Fed needs more evidence of a softening labor market before easing policies further.
Sector Performance:
- Technology and megacap stocks led the gains, with Amazon and Alphabet posting significant increases.
- Wells Fargo saw a boost after an upgrade from S&P Global, while Broadcom fell due to a lukewarm revenue forecast.
Volume and Trends:
Trading volume was lighter than average, with 14.5 billion shares traded compared to the 20-session average of 17.8 billion. Despite this, the market showed strong breadth, with advancing issues outpacing decliners on both the NYSE and Nasdaq.
This week's performance underscores the market's sensitivity to employment data and geopolitical developments, particularly in the context of ongoing U.S.-China trade negotiations.
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