US markets trade mostly flat as investors digest jobs data

US stocks were mostly flat on Friday after stronger than expected US jobs data pointed to a strong economy but also raised concerns the Federal Reserve may wait longer to cut interest rates than many investors had hoped.

The S&P 500 ended the day essentially flat 0.11% lower after touching a record-high intraday. The Dow closed 0.22% lower and the tech heavy Nasdaq closed down 0.23%.

All three of the major indexes finished the week up on last week’s close with the Dow adding 0.29%, the S&P 500 adding 1.32% and the Nasdaq up 2.38%.
The big news on the day was the May non farm payroll numbers. Nonfarm payrolls increased by 272,000 in May, well above the 190,000 consensus estimates and April’s 175,000 gain. Average hourly wages increased 0.4% last month and ticked up 4.1% from a year ago. However, even with the job gains, the unemployment rate ticked higher to 4%.

Traders have now lowered their expectations of a rate cut and see a 56 per cent chance of a September rate reduction, according to the CME’s FedWatch tool. Investors will now turn their attention to US inflation data next week and the Federal Reserve’s two-day policy meeting, which ends on June 12.

In company news, AI giant Nvidia closed in the red on Friday, but still ended the week up 10%. The stock set a record high on Thursday after pushing past the $3 trillion mark for the first time on Wednesday. The chipmaker’s highly anticipated 10 for 1 share split is set to be implemented after the close and could make the US$1000 stock cheaper for investors.

Video game retailer GameStop closed down 40% after posting disappointing net sales numbers well below consensus expectations. Adding to the negative sentiment, the company also gave an update on its ongoing stock sales, saying it would sell an additional 75 million shares on top of the 45 million share sale it had announced in May that raised more than $900 million.

Turning to US sectors, the worst performer was Utilities which closed down 1.09%. The best performing sector was Financials which finished up 0.35%.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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