Megacaps push Nasdaq, S&P 500 to record highs after payrolls data
Fed rate cut debate in view as U.S. job market cools
S&P 500 tech sector hits record high
Banks down ahead of Q2 results next week
Macy's up on report Arkhouse, Brigade Capital raise buyout offer
Indexes: Dow 0.04%, S&P up 0.44%, Nasdaq up 0.83%
Updates to 2:29 p.m. ET/1829 GMT
By Ankika Biswas, Lisa Pauline Mattackal and Saeed Azhar
July 5 (Reuters) -The tech-heavy Nasdaq and benchmark S&P 500 indexes jumped to record highs on Friday, as most megacap stocks hit all-time highs following newdata that signaled U.S. labor market weakness and pulled Treasury yields lower.
The Dow Jones Industrial Average was flat as energy and financial stocks fell.
Microsoft MSFT.O, Meta Platforms META.O, Amazon.com AMZN.O and Apple AAPL.O advanced by 1.2%-4.9%to record peaks.
This pushed information technology .SPLRCT to an all-time high, and madeS&P 500 communication services .SPLRCL the top sector performer with a0.6% rise to its highest level since 2000.
As of 2:29 p.m. ET, the Dow .DJI rose 16.44 points, or 0.04%, to 39,324.44. The S&P 500 .SPX gained 24.44 points, or 0.44%, at 5,561.46 and the Nasdaq Composite .IXIC rose 150.44 points, or 0.83%, to 18,338.74.
All three indexes remain on course for weekly gains.
Labor Department data showed U.S. job growth slowed marginally in June, and the unemployment rate rose to an over 2-1/2-year high, while wage gains slowed.
Investors expect the data could stir more active debate on interest-rate cuts when the Federal Reserve meets later this month.
Odds of the U.S. central bank delivering its first rate cut in September jumped to 79% from 66% seen before the data, CME's FedWatch Tool showed.
"The employment data is not indicative of an imminent recession but supports the soft-landing view," said Jack McIntyre, portfolio manager at Brandywine Global. "This clearly increases the Fed's confidence level that policy rates are too restrictive, and they need to cut."
Data released earlier this week also pointed to the U.S. economy losing steam, helping the S&P 500 and Nasdaq notch record closing highs during Wednesday's holiday-shortened session.
"We're in this kind of stagflation adjacent environment - growth is moderating, inflation is staying where it is for the time being," said Alex McGrath, chief investment officer for NorthEnd Private Wealth.
He said the environment is not great for small caps, which are sensitive to interest rates, but the megacap stocks continue to pump out strong earnings which is keeping the market strong.
The Russell 2000 Small Cap index is down 1.24% for the week.
Major banks fell ahead of second-quarter corporate earnings reports starting next Friday.
Higher interest rates and an uncertain economic environment are casting a cloud over U.S. bank earnings.
Bank of America BAC.N, Wells Fargo WFC.N and JPMorgan & Chase JPM.N fell between 1.2%and nearly 2%, pushing the S&P 500 banks index .SPXBK down 1.5%.
Macy's M.N on Friday jumped 10% after a report said Arkhouse Management and Brigade Capital raised their bid to buy the department store chain for about $6.9 billion.
Declining issues outnumbered advancers by a 1.17-to-1 ratio on the NYSE. On Nasdaq, declining issues outnumbered advancers by a 1.29-to-1 ratio.
The S&P 500 posted 18 new 52-week highs and eight new lows while the Nasdaq Composite recorded 38 new highs and 145 new lows.
Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru and Saeed Azhar in New York; Editing by Saumyadeb Chakrabarty, Shounak Dasgupta, Shinjini Ganguli and Richard Chang
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
