THE S&P 500 and the Nasdaq hit new intra-day record highs on Friday (Mar 8) after data showing a rise in the unemployment rate and moderation in wage gains bolstered expectations that the US Federal Reserve could begin cutting interest rates by the middle of this year.
US job growth accelerated in February, with nonfarm payrolls increasing by 275,000 jobs against an expected 200,000 rise. Data for January, however, was revised lower to show that 229,000 jobs were created.
The unemployment rate rose to 3.9 per cent in February after holding at 3.7 per cent for three straight months, while wage growth slowed to 0.1 per cent on a monthly basis.
“At the end of the day this was a pretty dovish print because we had slower wage gains,” said Cameron Dawson, chief investment officer of NewEdge Wealth in New York.
“As of right now, the labour market is tight and healthy. However, it’s not as hot as it was, which takes some of the inflation pressure off.”
Traders now see an 81.1 per cent chance of the Federal Reserve cutting interest rates in June, compared with 74.4 per cent before Friday’s data, according to CME’s FedWatch Tool.
AI darling Nvidia hit a record high, rising 3 per cent and outperforming megacap growth and technology peers. Rivals Advanced Micro Devices and Micron Technology rose about 2 per cent each.
Among the 11 major S&P 500 sectors, consumer staples was the biggest loser.
At 09.37 am ET, the Dow Jones Industrial Average was up 8.98 points, or 0.02 per cent, at 38,800.33, the S&P 500 was up 9.57 points, or 0.19 per cent, at 5,166.93, and the Nasdaq Composite was up 55.76 points, or 0.34 per cent, at 16,329.14.
The benchmark S&P 500 index closed at a record high on Thursday after Fed chair Jerome Powell said the central bank was “not far” from gaining the confidence that inflation is falling sufficiently to begin cutting interest rates.
Focus now shifts to consumer prices data due next week for more cues on potential rate cuts.
Broadcom slipped 2.9 per cent after the tech company’s full-year forecast failed to impress investors.
Shares of Marvell Technology shed 6.7 per cent after it forecast first-quarter results below market expectations on soft demand in its wireless infrastructure, consumer and enterprise markets.
Gap climbed 4.4 per cent after the retailer beat Wall Street expectations for fourth-quarter results, buoyed by strong demand on improved product offerings at its Old Navy and namesake brands during the holiday season, and lower markdowns.
Costco Wholesale eased 5.5 per cent as quarterly sales fell short of estimates due to tepid demand for higher-margin goods.
Advancing issues outnumbered decliners by a 3.86-to-1 ratio on the NYSE and by a 3.26-to-1 ratio on the Nasdaq.
The S&P index recorded 36 new 52-week highs and no new lows, while the Nasdaq recorded 57 new highs and 15 new lows. REUTERS
