US stocks jump as weak jobs data fuels rate-cut talk

Traders work on the floor of the New York Stock Exchange (NYSE) in New York December 27, 2018. ― Reuters pic
Traders work on the floor of the New York Stock Exchange (NYSE) in New York December 27, 2018. ― Reuters pic

NEW YORK, June 7 — stocks rose at the open today following a weak US jobs report that bolstered expectations that the Federal Reserve could soon cut interest rates.

The early gains added to the week’s advance following dovish comments from top Fed officials earlier in the week that analysts said opened the door to an interest rate cut in the coming months.

About 15 minutes into trading, the Dow Jones Industrial Average stood at 25,904.52, up 0.7 per cent from yesterday’s closing level.

The broad-based S&P 500 gained 0.8 per cent to 2,866.06, while the tech-rich Nasdaq Composite Index jumped 1.0 per cent to 7,691.27.

The US 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 per cent, 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.

The lackluster hiring data come as the US is embroiled in multi-front trade negotiations. President Donald Trump has announced a plan to impose tariffs on Mexican goods on Monday unless Mexico meets Trump’s expectations for stemming the flow of illegal immigrants to the US.

Fed chief Jerome Powell earlier this week said the was closely watching ongoing US trade talks with Mexico and and would take action if the economy falters.

“The report will understandably add to speculation about Fed easing,” said Jim O’Sullivan, chief US economist at High Frequency Economics. “That said, we think more weakness will still be needed for actual easing.”

But the chances of a rate cut as soon as June or July have increased. — AFP

Source: The Malay Mail Online

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