Stock market today: Wall Street's record-setting rally rolls on as jobs data raises rate-cut hopes

NEW YORK (AP) — U.S. stocks are rising toward more records Friday after a highly anticipated report on the job market bolstered Wall Street's hopes that interest rates may soon get easier.

The S&P 500 was 0.4% higher and on track to set an all-time high for a third straight day following Thursday's pause in trading for the Fourth of July holiday. The Dow Jones Industrial Average was edging up by 14 points, or less than 0.1%, as of 2:30 p.m. Eastern time, and the Nasdaq composite was adding 0.8% to its own record.

The action was more decisive in the bond market, where Treasury yields sank following the nuanced U.S. jobs report. Employers hired more workers last month than economists expected, but the number was still a slowdown from May’s hiring. Plus, the unemployment rate unexpectedly ticked higher, and the U.S. government said hiring in earlier months was lower than it had previously indicated.

Altogether, the data reinforced belief on Wall Street that the U.S. economy’s growth is slowing under the weight of high interest rates. That’s precisely what investors want to see, because a slowdown would keep a lid on inflation and could push the Federal Reserve to begin cutting its main interest rate from the highest level in two decades.

The question is whether the economy can remain in this Goldilocks state of not too hot and not too cold, while the Federal Reserve times its next moves precisely. The hope is that the Fed will lower interest rates early and significantly enough to keep the economic slowdown from sliding into a recession, but not so much that it allows inflation to regain strength and take off again.

The clearest takeaway from the jobs report for financial markets was that it keeps the Fed on track to cut its main interest rate later this year, likely in September and perhaps again in December. The two-year Treasury yield, which closely tracks expectations for Fed action, fell to 4.60% from 4.71% late Wednesday.

The yield on the 10-year Treasury, which is the centerpiece of the bond market, fell to 4.27% from 4.36% late Wednesday and from 4.70% in April. That's a notable move for the bond market and offers support for stock prices.

Friday’s jobs report follows a mass of data showing a slowdown across the U.S. economy. Reports earlier this week said business activity in both the U.S. services and manufacturing sectors contracted last month, turning in weaker readings than economists expected. And U.S. shoppers at the lower end of the income spectrum have been showing how difficult it is to keep up with still-rising prices, as balances owed on credit cards swell.

“What matters for long-term investors is whether fears of a recession become a reality,” said Brian Jacobsen, chief economist at Annex Wealth Management. “We think it’s unlikely we’ll see a recession this year or next, but that doesn’t mean the markets won’t fear one.”

On Wall Street, gold miner Newmont rose 2.2% for one of the larger gains in the S&P 500. It benefited from a rise for the price of gold, which usually strengthens when interest rates fall. It's the flip side of when rates are rising and bonds are paying higher yields, which can pull investors away from gold, which pays its holders nothing.

Gains for some big, influential stocks also helped support the market, even though the majority of stocks within the S&P 500 fell. Meta Platforms rose 4.9%, and Apple added 1.7%.

Amazon rose 1.2% after the announcement of a deal where the parent company of Saks Fifth Avenue will buy Neiman Marcus Group for $2.65 billion. Amazon will hold a minority stake in the deal.

On the losing end of Wall Street were companies tied closely to cryptocurrency activity, as bitcoin briefly tumbled below $54,000 from nearly $63,000 early this week. The cryptocurrency's value is roughly back to where it was in February.

Coinbase Global slipped 0.8%, and Robinhood Markets fell 1.1%.

In stock markets abroad, London’s FTSE 100 fell 0.5% after U.K. voters ushered in a new regime by throwing out Conservatives in this week’s national election.

The United Kingdom experienced a run of turbulent years during Conservative rule that left many voters pessimistic about their country’s future. The U.K.’s exit from the European Union followed by the COVID-19 pandemic and Russia’s invasion of Ukraine battered the economy. Rising poverty and cuts to state services have led to gripes about “Broken Britain.”

Germany’s DAX rose 0.1% after the government agreed on a budget for 2025 and a stimulus package for Europe’s largest economy, ending a monthslong squabble that threatened to upend Chancellor Olaf Scholz’s center-left coalition.

The disagreements had fueled speculation that the already unpopular government could collapse and prompt a snap parliamentary election in which Germany could follow other European countries by swinging toward the political right.

In Asia, Japan’s Nikkei 225 topped the 41,000 level early on Friday to rise above its record closing level set on Thursday, but it ended the day marginally lower.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.