US STOCKS-Wall Street stocks close flat; jobs data strong but rates still high

KOSS

07/06/2024 21:00

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 (Updates to 4 PM ET)
    By Chibuike Oguh
       NEW YORK, June 7 (Reuters) - Wall Street stocks ended
mostly flat on Friday in choppy trading after
stronger-than-expected U.S. jobs data pointed to a robust
economy but prompted worries the Federal Reserve may wait longer
to cut interest rates than many investors had hoped. 
    The U.S. economy generated about 272,000 jobs in May, far
more than the 185,000 analysts had forecast, according to a
Labor Department report. The unemployment rate inched up to 4%.
    The benchmark S&P 500  .SPX  slipped immediately after the
report while U.S Treasury yields climbed as traders slashed bets
on a September rate reduction. The index recovered and briefly
hit a fresh intraday record high as investors noted the data
pointed to underlying economic health.
    According to preliminary data, the S&P 500  .SPX  lost 7.01
points, or 0.13%, to end at 5,345.95 points, while the Nasdaq
Composite  .IXIC  lost 42.79 points, or 0.25%, to 17,130.33. The
Dow Jones Industrial Average  .DJI  fell 91.88 points, or 0.24%,
to 38,794.29.
    "This tells you there's certainly not going to a cut in the
short term, and with the bond yields going back up it's putting
a lot of pressure on the risk-on trade, which is probably small
caps," said Sandy Villere, portfolio manager at Villere & Co in
New Orleans.
    "It's just a function of interest rates and maybe a little
higher for longer, and people have to recalibrate for that type
of environment. So it definitely looks like a risk-off trade so
far today," he added.
    Traders now see a 56% chance of a September rate reduction,
according to the CME's FedWatch tool. Investors will eye U.S.
inflation data next week and the Federal Reserve's two-day
policy meeting, which ends on June 12. 
    "No one expects the Fed to cut (rates next week), but will
they open the door for a cut as soon as September is the big
question on everyone's mind," said Ryan Detrick, chief market
strategist at the Carson Group, adding he still sees a September
reduction on the table. 
    
    GameStop  GME.N  slumped in volatile trading just as stock
influencer "Roaring Kitty" kicked off his first livestream in
three years. The gaming retailer had announced a potential stock
offering and a drop in quarterly sales. 
    Other so-called meme stocks, including AMC Entertainment
 AMC.N  and Koss Corp  KOSS.O , also fell.
    Nvidia  NVDA.O  slipped, on track to extend the previous
session's losses, with its valuation again dipping below the $3
trillion mark. Its highly anticipated 10-for-1 share split is
due after markets close and could make the more-than-$1,000
stock cheaper for investors.
    Lyft  LYFT.O  shares rose, following a forecast of 15%
annual growth in its gross bookings through 2027 after markets
closed on Thursday.

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 (Reporting by Chibuike Oguh in New York; additional reporting
by Lisa Mattackal and Johann M Cherian in Bengaluru; Editing by
Pooja Desai and David Gregorio)
 ((Chibuike.Oguh@thomsonreuters.com; +332-219-1834; Reuters
Messaging: chibuike.oguh.thomsonreuters.com@reuters.net))