Wall Street stocks finished modestly lower on Friday (Jun 7) following a choppy session after strong US job growth in May further dampened the outlook for imminent interest rate cuts.
The world’s biggest economy added 272,000 jobs last month, significantly above expectations even as unemployment inched higher to 4 per cent.
Investors have shifted their expectations on Federal Reserve interest rate cuts, now eyeing fewer cuts in 2024 if the central bank lowers rates at all.
Friday’s data “doesn’t give the Fed a lot of room to cut”, said Adam Sarhan of 50 Park Investments.
The Dow Jones Industrial Average finished down 0.2 per cent at 38,798.99.
The broad-based S&P 500 declined 0.1 per cent to 5,346.99, and the tech-rich Nasdaq Composite Index lost 0.2 per cent at 17,133.13.
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Despite the declines, two of the three major indices remain near all-time records struck earlier in the week.
Friday’s losses are “not a big deal because on a weekly basis we are still near the highs of the week, and that in itself is bullish”, Sarhan said.
Old National Bancorp and First Merchants Corporation both lost more than 1 per cent after Moody’s placed them among a group of six regional banks on review for a possible downgrade due to exposure to commercial real estate risk.
GameStop plummeted nearly 40 per cent after announcing plans to sell up to 75 million new shares in its latest move since upstart investor Keith Gill resurfaced more than three years after helping to spur the “meme stock” phenomenon.
On Friday, Gill, also known as “Roaring Kitty”, hosted a livestream in which he reiterated support for GameStop and its management. The video game retailer also announced a first-quarter loss of US$32.3 million. AFP
