US stocks opened higher on Friday as investors digested a crucial jobs report that provided clues to the size of this month’s expected interest rate cut and the resilience of the US economy.
Tech stocks reversed earlier losses, with the Nasdaq Composite (^IXIC) up about 0.2% in early trading. The S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) were also up around 0.2% each.
The US economy added 142,000 jobs in August, which trailed expectations for about 165,000 jobs added. Prior month job growth was also revised lower, as the labor market showed signs of continued cooling. The unemployment rate, however, ticked back down to 4.2%.
The report shifted expectations for the Fed to enact a more sizable rate cut at its meeting in less than two weeks. According to the CME FedWatch tool, traders see a 50-50 chance of a 50 basis point cut, which was up significantly from Thursday.
Despite anemic closes, stocks have whipsawed this week as the market assessed incoming economic data to set expectations on the size of the Fed’s rate cut. All three indexes are set for significant weekly declines.
Read more: Fed predictions for 2024: What experts say about the possibility of a rate cut
Meanwhile, in corporate news, chipmaker Broadcom’s (AVGO) shares fell in early trading on the heels of a lackluster sales forecast. While the Apple supplier is benefiting from a surge in AI spending, its other divisions are falling short.
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