Dow Average Hits Peak as Jobs Ease Fed-Hike Worry: Markets Wrap
(Bloomberg) — A sharp slowdown in the US jobs market spurred gains in most stocks on Wall Street amid speculation the Federal Reserve won’t be forced to raise interest rates any time soon.
The Dow Jones Industrial Average climbed 1.1%, hitting all-time highs. While those wagers lifted the vast majority of shares in the S&P 500, the index closed little changed amid a slide in chipmakers. Short-dated Treasury yields fell as money markets dialed back expectations of a Fed hike in coming months. The dollar slid against all developed-world currencies.
US hiring slowed sharply in June, curbing some of the budding momentum in job growth this year. Nonfarm payrolls increased 57,000 last month after downward revisions to the prior two months took some of the shine off recent blockbuster reports. The unemployment rate fell to 4.2%.
“Just when investors thought they had the labor market figured out, the June jobs report threw them a curveball,” said Bret Kenwell at eToro. “A disappointing jobs report isn’t exactly good news, but it may give risk-on assets a silver lining: Less pressure on the Fed to take a hawkish stance.”
While the report doesn’t scream labor-market trouble, he noted it does cool the narrative a bit. That may nudge the conversation back toward the Fed’s dual mandate — balancing inflation with employment — rather than forcing policymakers to focus almost exclusively on price pressures, Kenwell added.
“A labor market that is still expanding, but no longer overheating, allows the Fed to remain patient while assessing price pressures,” said Andrew Dubinsky at UBS Chief Investment Office. “If disinflation continues as expected, policymakers will have little reason to move away from a holding pattern in the second half of the year.”
Fed Chairman Kevin Warsh said this week that price risks have come down, while repeating his determination to bring inflation back to the 2% target. While officials held rates steady last month, they did signal growing support for hikes this year amid inflation running at its fastest since 2023.
“Warsh can wipe his brow,” said Brian Jacobsen at Annex Wealth Management. “The labor market isn’t overheating. Inflation expectations are moderating. It means the Fed can take the whole summer off if it wants as it won’t have to hike or cut.”
Meantime, tech volatility gripped trading ahead of the US holiday, with a key gauge of semiconductor firms extending a back-to-back plunge to 11%. Wall Street has become increasingly anxious about the outlook for tech stocks after massive gains, with doubts swirling over whether spending in artificial intelligence will be justified.
“Investors face no shortage of questions,” said Bespoke Investment Group strategists. “We can all take our best guesses at these questions, but only time will tell, and as events unfold, the market will continue to react with gains and losses.”
Corporate Highlights:
Anthropic PBC is in talks with Samsung Electronics Co. to be a manufacturing partner for a custom artificial-intelligence chip, the Information said, citing people familiar with the plan. OpenAI has begun preliminary discussions about giving the US government a 5% stake in the ChatGPT-developer, the Financial Times reported, citing two people familiar with the talks. For the second straight quarter, two Blue Owl Capital Inc. private credit funds were hit with the industry’s largest redemption requests, forcing the manager to again cap withdrawals. Genuine Parts Co. has attracted a cash bid for its auto-parts arm from O’Reilly Automotive Inc. as it seeks to refocus on its industrials business, according to people familiar with the matter. Rivian Automotive Inc. raised its full-year sales outlook in a promising sign as the maker of electric vehicles begins deliveries of its lower-cost SUV seen as critical to the company’s future. What Bloomberg strategists say…
“The market seems to be slowly coming to the view that the Warsh Fed is not too dissimilar to the Powell Fed. If that means a long hold rather than hikes — despite core inflation above 3% — it also means curve steepening eventually.”
—Edward Harrison, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 was little changed as of 4 p.m. New York time The Nasdaq 100 fell 1.6% The Dow Jones Industrial Average rose 1.1% The MSCI World Index rose 0.4% Currencies
The Bloomberg Dollar Spot Index fell 0.4% The euro rose 0.5% to $1.1432 The British pound rose 0.5% to $1.3347 The Japanese yen rose 0.9% to 161.10 per dollar Cryptocurrencies
Bitcoin rose 2.2% to $61,392.57 Ether rose 5% to $1,698.02 Bonds
The yield on 10-year Treasuries was little changed at 4.48% Germany’s 10-year yield advanced three basis points to 2.90% Britain’s 10-year yield advanced two basis points to 4.78% The yield on 2-year Treasuries declined four basis points to 4.14% Commodities
West Texas Intermediate crude fell 0.1% to $68.48 a barrel Spot gold rose 2.2% to $4,120.36 an ounce ©2026 Bloomberg L.P.
