S&P 500, Nasdaq post record closes Friday as jobs report raises Fed rate cut hopes

The S&P 500 rose to a new high on Friday, posting a record close as the latest jobs report reignited hopes for rate cuts from the Federal Reserve.

The broad market index advanced 0.54%, closing at 5,567.19, while the Nasdaq Composite gained 0.90% to end at 18,352.76. Both indexes reached all-time highs during the session and ended at records, with the S&P 500 registering its 34th record close in 2024. The Dow Jones Industrial Average added 0.17%, or 67.87 points, ending at 39,375.87.

The S&P 500′s rally this year has grown to 16.7%, with the benchmark posting its fourth positive week in the last five as investors bet that any economic weakness later this year will be met with a Federal Reserve rate cut. The Nasdaq’s year-to-date gain is 22.3%.

Widely monitored labor data released Friday morning reflected a 206,000 increase in nonfarm payrolls in June, but a slight uptick in the unemployment rate, which rose to 4.1%. Economists expected the jobless rate to remain steady at 4%.

Treasury yields fell following the report on expectations the uptick in unemployment would spur the Fed to cut interest rates later this year. Investors hiked their bets on a September interest rate cut, with odds of a quarter-point cut increasing to about 77%, up from 64% a week ago, according to the CME Group’s FedWatch Tool.

“On one hand, the downward revisions to prior months and the rise in the unemployment rate raises the odds of a September Fed rate cut — bond markets are certainly celebrating this,” said Seema Shah, chief global strategist at Principal Asset Management. “But those same figures cannot help but prompt a twinge of concern about the direction of the U.S. economy. The broad host of economic data all point to a softening — today’s report adds to that picture.”

Tesla rose more than 2%, posting a whopping week-to-date gain of about 27%, while Apple shares jumped more than 2% to a new all-time high. Nvidia slid nearly 2% following a rare Wall Street downgrade, which cited limited upside for the chipmaker. The stock was still up about 1.9% for the week.

All three major indexes finished the week in the green. The Nasdaq Composite advanced 3.5%, and the S&P 500 climbed nearly 2% during the period. The Dow underperformed, adding close to 0.7%. Markets were closed Thursday for Independence Day.