Wall Street had a mixed day of trading after the July 4th holiday, with futures for the S&P 500 edging up slightly and futures for the Dow Jones Industrial Average slipping just a bit. Investors were cautious ahead of the upcoming June jobs report from the U.S. government, which could sway the Federal Reserve’s decision on interest rates.
The report will detail how many jobs were added to payrolls in June. Traders are keenly interested because they want to see if the economy is slowing enough to keep inflation in check, without tipping into a recession. If the numbers suggest a slowdown, it could increase the chances of the Federal Reserve cutting interest rates, which are currently at their highest in twenty years.
Lower rates would make borrowing cheaper and could ease pressure on the economy.
Economists predict that employers added 190,000 jobs in June, which is a solid number but lower than the robust 272,000 added in May. Job openings have been declining steadily this year, and although layoffs are still relatively low, they have increased recently.
The number of people receiving jobless benefits is also at its highest level since late 2021.
Anderson Alves from Activ Trades noted, “The report will be crucial in shaping expectations for Federal Reserve rate cuts in the near term.” Currently, markets anticipate the possibility of two rate cuts this year, whereas the Fed’s own forecast suggests only one cut in 2024.
In other market news, Tesla’s stock rose another 1.7% early Friday, marking its eighth consecutive day of gains. This comes after Tesla reported that its sales in the last quarter declined, but not as sharply as expected. Since June 24th, Tesla’s shares have risen by nearly 36%.
In Europe, shares were mostly up after the Labour Party’s victory over the Conservatives in the recent UK election. Initially, London’s FTSE 100 index rose 0.3% before leveling off. The British pound strengthened slightly against the dollar, while the euro also saw a small increase.
