Stocks decline after jobs report crushes expectations

US stocks fell on Friday after the jobs report, which is central to expectations of interest rate cuts, showed much stronger employment growth than expected.

The S&P 500 (^GSPC) fell 0.3%, while the Dow Jones Industrial Average (^DJI) fell 0.2%, after a lackluster session Thursday for the three major gauges. The Nasdaq Composite (^IXIC) fell nearly 0.4%.

Investors lifted stocks on hopes that more data would indicate an economic slowdown. But the Labor Department report provided more evidence that parts of the economy are too hot for the central bank’s fight against inflation, fueling the idea of ​​keeping interest rates higher for longer.

The upcoming May jobs report reinforced the idea that interest rates falling from two-decade highs likely won’t happen until the fall.

The US economy added 272,000 jobs in May, exceeding expectations. However, the unemployment rate rose, rising to 4.0%.

Read more: How does the labor market affect inflation?

Elsewhere in the markets, there is also a wait for the live streaming promised by GameStop (GME) backer Keith Gill, also known as “Roaring Kitty.” The event, scheduled for noon ET on Friday, will be Gill’s first live appearance on YouTube since he helped ignite a meme stock rally three years ago.

GameStop shares closed up 47% on Thursday, but fell sharply after the video game retailer said it would sell up to 75 million shares and said sales declined in the first quarter.

Nvidia’s (NVDA) 10-for-1 stock split is also expected to be finalized, expected after the market close. A midweek rally briefly pushed the artificial intelligence chip maker to a $3 trillion valuation, but its shares lost ground as short bets piled up against the company.

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He lives4 updates

  • Stocks are trending in morning trading

    Here are some of the stocks topping Yahoo Finance’s ETFs page during morning trading on Friday.

    GameStop (GME): Shares of the video game retailer and non-commercial stocks fell 19% on Friday morning after announcing quarterly results that… Missed analyst estimates It announced the stock sale just hours before an upcoming live broadcast from “Roaring Kitty,” a nickname used in the past by bullish retail investor Keith Gill.

    docosin (Doku) The software company that specializes in electronic agreements fell 8% after reporting second-quarter billing guidance that fell short of Wall Street expectations. However, investors viewed the updates more positively, as the company beat earnings estimates and boosted its stock buyback program with up to 1 billion outstanding common shares.

    LEFT (Lyft)Shares of the ride-hailing company rose 3% on Friday morning, following the company’s decision to revise its growth forecasts upward and reaffirm its guidance for the second quarter. Lyft now expects roughly 15% growth in bookings over the next three years.

    Vail Resorts (MTN) The mountain resort fell 13% after the company missed earnings expectations and cut full-year EBITDA forecasts. CEO Kirsten Lynch cited a lack of rebound in ticket visits in the spring season as a reason for lowering the guidance.

  • Stocks decline as interest rate cut expectations decline

    The May jobs report, which came in hotter than expected, put another damper on the narrative that the Fed will cut interest rates soon. The latest reading provided another signal that challenges previous signs of a slowdown in the economy.

    The S&P 500 (^GSPC) fell 0.3%, while the Dow Jones Industrial Average (^DJI) fell 0.2%, after a lackluster session Thursday for the three major gauges. The Nasdaq Composite (^IXIC) fell nearly 0.4%.

  • Eyes on Robinhood

    Robinhood (HOOD) remains on several impressive lines.

    First, the stock price: up 27% in the last 30 days. The second, the flow of news — from debuting a new credit card, to reporting a strong first quarter, to spending $200 million yesterday to buy cryptocurrency exchange Bitstamp.

    “This is a strategic move by HOOD to expand its crypto business, and we believe it validates our thesis that HOOD is a great way to seek exposure to crypto stocks at the start of an exciting new crypto cycle,” Bernstein’s Gautam Chogani said this morning.

    I had coffee with Robinhood co-founder and CEO Vlad Tenev yesterday afternoon following the Bitstamp deal. The guy’s got his ego back, but you can tell he’s gained a whole new level of experience after going through what he did several years ago — from layoffs to testifying about the GameStop (GME) craze. Watch what the company does next in wealth management.

    Our latest conversation on Yahoo Finance Live is below.

  • Reminder while reading jobs report

    The market still wants to believe in 2024 interest rate cuts.

    So keep that in mind as you browse today’s jobs report and plan how it will impact Fed policy.

    A good point made by Deutsche Bank’s Jim Reed this morning after the ECB’s interest rate cut yesterday:

    “Although the tone has been somewhat hawkish in several aspects, it now makes them the fourth G10 central bank to cut interest rates, after Canada, Sweden and Switzerland. In turn, this move reinforced the idea that the global monetary policy cycle is moving towards an easing approach.” , with investors anticipating further cuts on the horizon, so it represents a major shift from most of the past two years, when central banks were raising interest rates quickly to try to reduce inflation.

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