Wall Street stocks rose and the dollar fell Friday after a weak US jobs report bolstered expectations that the Federal Reserve would soon cut interest rates.
Equity markets in Asia and Europe also advanced, with investors shrugging off trade war worries as the United States and Mexico engaged in a third day of negotiations over US President Donald Trump’s plan to impose tariffs on Monday.
The United States added just 75,000 net new positions in May, less than half the 180,000 economists had been expecting, while unemployment held steady at 3.6 percent, according to the closely-watched Labor Department data.
The report also downgraded the job gains in both March and April, which essentially nullified the May increase. That left the average job gains for the past three months at 151,000, compared to the 12-month average of 196,000, signaling a slowdown in hiring, also attributed to the difficulty finding workers.
Major US indices all gained at least one percent, with the Dow finishing at 25,983.94, up almost five percent for the week.
Large technology companies had an especially good day, with Amazon, Facebook, Apple and Google parent Alphabet all winning at least two percent.
“Anytime you see the stock market roll higher on an unexpectedly weak economic report, it is because they are expecting a fed rate cut,” said Chris Low of FTN Financial.
On trade, Trump said Friday there is a “good chance” that a deal can be reached with Mexico on controlling the flow of migrants to avert the imposition of trade tariffs.
But Trump warned that if an agreement cannot be reached in crunch talks between US and Mexican officials in Washington, the tariffs will go into place on Monday starting at five percent — a move which could clobber Mexico’s economy.
The dollar, meanwhile, moved solidly lower against the euro and other currencies as outlook on the Fed shifted.
“It looks like ‘bad news is good news (for stocks)’ is back,” Fawad Razaqzada, a technical analyst at Forex.com, said of the Wall Street rally and retreat in the greenback following the weak US jobs data.
– Key figures around 2030 GMT –
New York – Dow: UP 1.0 percent at 25,983.94 (close)
New York – S&P 500: UP 1.1 percent at 2,873.34 (close)
New York – Nasdaq: UP 1.7 percent at 7,742.10 (close)
London – FTSE 100: UP 1.0 percent at 7,331.94 (close)
Frankfurt – DAX 30: UP 0.8 percent at 12,045.38 (close)
Paris – CAC 40: UP 1.6 percent at 5,364.05 (close)
EURO STOXX 50: UP 1.2 percent at 3,378.38 (close)
Tokyo – Nikkei 225: UP 0.5 percent at 20,884.71 (close)
Hong Kong – Hang Seng: closed for a public holiday
Shanghai – Composite: closed for a public holiday
Euro/dollar: UP at $1.1335 from $1.1276 at 2100 GMT Thursday
Pound/dollar: UP at $1.2736 from $1.2694
Dollar/yen: DOWN at 108.15 yen from 108.40 yen
Oil – Brent Crude: UP $1.62 at $63.29 per barrel
Oil – West Texas Intermediate: UP $1.40 at $53.99 per barrel
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