Wall Street gains as slowing job growth eases Fed fears

Wall Street’s main indexes rose on Friday after monthly U.S. jobs growth came in weaker than expected, soothing concerns the Federal Reserve would need to move more aggressively to cool the economy.

The U.S. added the fewest jobs in 2-1/2 years in June, although persistently strong wage growth pointed to still-tight labor market conditions, U.S. government data showed.

The data showing nonfarm payrolls increased by 209,000 jobs last month followed Thursday’s report that June private payrolls surged, which sparked a sell-off on fears the Fed would move aggressively to hike rates to tame inflation.

“There was a wave of panic that went through with … some of the early employment numbers,” said Carol Schleif, chief investment officer with the BMO Family Office.

“After people had a chance to reconsider and look at the broader numbers today and look under the hood and realize that maybe it’s not as hot as we thought based on yesterday’s numbers.”

The Dow Jones Industrial Average (.DJI) rose 94.45 points, or 0.28%, to 34,016.71; the S&P 500 (.SPX) gained 26.19 points, or 0.59%, at 4,437.78; and the Nasdaq Composite (.IXIC) added 116.15 points, or 0.85%, at 13,795.19.

Energy (.SPNY) and materials (.SPLRCM) led gains among S&P 500 sectors, while defensive groups including consumer staples (.SPLRCS) lagged.

The Fed is still widely expected to raise rates at its meeting later this month after pausing in June, as job growth remains above the pace in the decade before the pandemic.

Chicago Fed President Austan Goolsbee said he does not disagree with his fellow U.S. central bankers that rates will need to rise a couple more times this year to beat back too-high inflation.

The S&P 500 was still on pace to log a slight decline for the week.

In company news, Levi Strauss & Co (LEVI.N) shares tumbled 7% after the denim clothing maker cut its annual profit forecast.

Shares of Rivian Automotive (RIVN.O) surged 16% after the electric vehicle maker reported better-than-expected quarterly deliveries.

U.S.-listed shares of Alibaba gained 8.7% after Chinese authorities said they will impose a $984 million fine on Ant Group, ending the affiliate fintech company’s years-long regulatory overhaul.

Advancing issues outnumbered decliners on the NYSE by a 4.49-to-1 ratio; on Nasdaq, a 2.73-to-1 ratio favored advancers.

The S&P 500 posted 10 new 52-week highs and four new lows; the Nasdaq Composite recorded 39 new highs and 53 new lows. —Reuters.

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