New York, NY – Stocks surged on Friday following the release of the February jobs report, which revealed a slight increase in the unemployment rate. This development instilled confidence in investors that the Federal Reserve may implement rate cuts after its June meeting.
The S&P 500 index rose by 0.2%, building on another record high set on Thursday, while the Dow Jones Industrial Average remained stable. The Nasdaq Composite also saw a 0.3% gain after a significant increase the previous day.
The non-farm payrolls report for February showed that the U.S. economy added 275,000 jobs, surpassing expectations on Wall Street. However, the unemployment rate inched up to 3.9%, marking its first rise in four months. Prior to the release of the jobs data, futures on the stock markets were trading in the red.
Federal Reserve Chair Jerome Powell’s remarks to lawmakers earlier in the week played a significant role in boosting the market. Powell stated that the Fed is close to being confident that inflation is at an ideal level for the central bank to reduce borrowing costs.
Meanwhile, European Central Bank policymakers expressed support for a rate cut before their summer break, citing inflation levels falling faster than anticipated. Additionally, officials from the Bank of Japan are reportedly considering lifting interest rates out of the negative territory.
In corporate news, shares of Costco tumbled by 5% after the company’s quarterly sales fell short of expectations, overshadowing an earnings beat. Similarly, Broadcom’s stock dipped over 2% despite surpassing revenue expectations and forecasting $10 billion in sales of AI-linked chips.
Gold futures continued to rally, with spot gold eyes its largest weekly jump in five months amid growing optimism for a mid-year rate cut by the Federal Reserve.
Overall, the stock market is poised for a positive week as the jobs report fueled investor optimism by hinting at potential rate cuts in the near future.