U.S. stocks rose Thursday after the widely-watched monthly jobs report pointed to a resilient labor market, adding to optimism over the likelihood of additional trade deals, News.az reports citing Xinhua.
At 09:32 ET (13:32 GMT), the Dow Jones Industrial Average rose 80 points, or 0.2%, the S&P 500 index gained 24 points, or 0.4%, and the NASDAQ Composite climbed 120 points, or 0.6%.
Markets will see a shortened trading session on Thursday ahead of the July 4 Independence Day holiday, with the benchmarks adding to Wednesday’s record closing highs for the S&P 500 and the Nasdaq Composite.
Nonfarm payrolls show resilience
The U.S. economy added more jobs than anticipated in June, in a sign of ongoing resilience in the labor market despite recent concerns over the impact of sweeping tariffs.
Nonfarm payrolls rose 147,000 last month from an upwardly-revised 144,000 in May, according to a closely-watched report from the Bureau of Labor Statistics, as job gains in state government and health care were partially offset by declines in the federal workforce.
Economists had expected the figure would come in at 111,000.
Meanwhile, the unemployment rate decelerated slightly to 4.1%, and average hourly earnings growth also eased to 0.2% on a monthly basis, suggesting inflationary pressures from this source were limited.
"The good news here is that hourly wages certainly are not getting out of hand. They’re subdued at 0.2% and cooler than expected on a yearly basis,” said Peter Cardillo, chief market economist at Spartan Capital Securities.“
Additionally, the number of Americans filing new applications for jobless benefits fell to a six-week low last week.
Fed policymakers — who are partly tasked with aiming for maximum employment — have been keeping close tabs on incoming labor market data, especially as they remain wary of the impact of Trump’s tariff agenda on the wider economy.
Fed Chair Jerome Powell, who has faced intensifying pressure from President Donald Trump to quickly slash rates, has backed a cautious approach to future interest rate changes, but did say this week that the central bank could bring down borrowing costs at its four remaining policy meetings this year.
U.S. strikes trade deal with Vietnam
Sentiment has also received a boost after Trump said the U.S. has reached a trade agreement with Vietnam, notching a third deal ahead of the July 9 deadline, when the reciprocal tariffs are due to return.
The deal imposes a 20% tariff on most Vietnamese imports, and a 40% tariff on goods rerouted through Vietnam, a key source of imported goods like footwear and athletic apparel.
Last week’s U.S.-China trade deal, Canada’s last-minute pullback from its digital services tax, and statements that India is close to signing an agreement have fueled optimism for more deals ahead of Trump’s self-imposed deadline.
The U.S. Commerce Department has also lifted restrictions on chip design technology exports to China, company statements showed on Wednesday evening, as part of a recent trade agreement between Washington and Beijing.
However, in a note to clients, the brokerage said they believe "the Trump administration will maintain aggressive tariff stance" even as it negotiates these bilateral trade deals and fights legal challenges to the tariffs.
The effective U.S. tariff rate has jumped to 15%, six times greater than it was at the beginning of the year.
Trump’s tax bill continues progress
Markets are also closely monitoring developments on President Donald Trump’s sweeping tax-cut and spending bill.
The Republican-controlled U.S. House of Representatives advanced the bill earlier Thursday, a procedural step setting the stage for possible passage of the legislation in a vote expected later in the day.
Senate Republicans had narrowly passed the megabill on Tuesday, which is expected to add $3.3 trillion to $3.4 trillion to the national debt.
The nonpartisan Congressional Budget Office also projected that the bill could lead to nearly 12 million people losing their health insurance.
Tripadvisor has interest from Starboard - WSJ
In the corporate sector, Tripadvisor (NASDAQ:TRIP) stock rose after the Wall Street Journal reported that activist investor Starboard Value has taken a stake of more than 9% in the online travel company.
Datadog (NASDAQ:DDOG) also gained after the software company’s stock was announced as the newest addition to the S&P 500 index.
Crude just lower ahead of OPEC+ meeting
Crude prices fell Thursday, handing back some of the previous session’s gains after an unexpected build in U.S. inventories and ahead of an upcoming OPEC+ meeting, which is expected to result in an output hike.
At 09:32 ET, Brent futures dropped 0.5% to $68.74 a barrel and U.S. West Texas Intermediate crude futures fell 0.6% to $67.06 a barrel.
Both contracts gained around 3% on Wednesday, rising to their highest in one week as Iran suspended cooperation with the U.N. nuclear watchdog, raising concerns the lingering dispute over the Middle East producer’s nuclear program may result in a disruption to supply from this region.
U.S. oil inventories grew by 3.85 million barrels last week, government data showed on Wednesday, raising questions about just how strong fuel demand will be this summer season.
OPEC+, a group of top producers, will meet over the weekend, and is expected to boost production by 411,000 barrels per day in August.
