U.S. stocks opened higher Thursday after the Bureau of Labor Statistics reported that the economy added just 57,000 jobs in June, well below the roughly 113,000 economists had expected. The unemployment rate slipped to 4.2% from 4.3%, even as hiring slowed—a combination investors viewed as reducing the likelihood that the Federal Reserve will need to raise interest rates in the near term.

Wall Street responded immediately. The Dow Jones Industrial Average climbed about 334 points, or 0.6%, to around 52,640, reaching a fresh intraday record. The S&P 500 gained 0.7% to approximately 7,538, while the Nasdaq Composite rose 0.9% to about 26,260. The Russell 2000 added 0.8%, and the yield on the 2-year Treasury note declined as traders priced in lower odds of another Fed rate increase.

The June report snapped a three-month stretch of stronger hiring. Federal Reserve Chair Kevin Warsh has repeatedly said the central bank will remain data dependent, and Thursday’s numbers reinforced expectations that policymakers may be able to leave rates unchanged while continuing to monitor inflation and economic growth.

“This takes some of the pressure off of the inflation-fighting institution to hike near term,” said Bradford Smith, portfolio manager at Janus Henderson Investors.

Market movers

Tesla was among the early gainers after reporting 480,126 second-quarter vehicle deliveries, comfortably exceeding analysts’ expectations of about 406,600. Shares rose roughly 1% in early trading.

SpaceX (NASDAQ: SPCX) remained in focus ahead of its scheduled Nasdaq-100 inclusion on July 7. JPMorgan estimates the addition could generate roughly $4.3 billion in buying from passive index funds. Wedbush analyst Dan Ives initiated coverage with an Outperform rating and a $190 price target.

Defense contractor AeroVironment gained about 4% after securing a $500 million U.S. Army contract to develop counter-drone technology.

Semiconductor stocks attempted to stabilize following Wednesday’s sharp selloff. The previous session saw Micron Technology fall 10.6%, Intel lose 9%, Applied Materials decline 10%, and AMD drop 6.9% as investors questioned AI-related valuations. Early Thursday trading showed buyers cautiously returning to the sector.

Analyst outlook

Economists continue to debate the path ahead for interest rates.

Andrew Hollenhorst, chief U.S. economist at Citi, said continued moderation in employment would support additional Federal Reserve rate cuts later this year.

Meanwhile, Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Securities, said the economy remains healthy but investors may increasingly look beyond the largest technology companies for future market leadership.

Commodities and volatility

Gold rose about 1.8% to roughly $4,155 an ounce as investors balanced slowing economic growth against lower interest-rate expectations.

Crude oil eased toward $68 a barrel, reflecting reduced concerns over Middle East supply disruptions.

The CBOE Volatility Index (VIX) fell more than 4% to around 15.9, indicating continued investor confidence and relatively calm market conditions.

Overseas, markets were weaker. South Korea’s Kospi plunged 7.9% amid renewed selling across semiconductor companies, highlighting continued concerns over global chip-sector valuations.

For now, investors are interpreting a slower pace of hiring as positive news because it lowers the likelihood of additional Fed tightening. The key question for markets will be whether the labor market is simply cooling to a sustainable pace—or beginning to weaken more significantly. As trading gets underway before the July 4 holiday, Wall Street appears focused on the prospect of steady interest rates and continued economic expansion.

JBizNews Desk | New York
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