Stock Market Today: S&P 500 and Nasdaq Hit Records as Jobs Growth Slows

Stocks ended a holiday-shortened trading week with fireworks after signs of a slowing labor market raised the odds of a Federal Reserve rate cut coming sooner rather than later.

The cannonball in the market’s pool Friday was the June jobs report, which revealed a still strong but cooling labor market. U.S. nonfarm payrolls increased by 206,000 last month, the Bureau of Labor Statistics said Friday, or essentially in line with economists’ forecast for the creation of 200,000 jobs. Additionally, the surprisingly strong May jobs report was revised lower to 218,000 new hires from the 272,000 previously reported.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.

Profit and prosper with the best of expert advice – straight to your e-mail.

“Perhaps most concerning is the steady rise in unemployment, which rose for the third consecutive month to 4.1%, the loftiest level since November 2021,” writes José Torres, senior economist at Interactive Brokers. “If the trend continues, it will certainly provide the nation with interest rate relief. Market players are responding by raising the odds of the Fed dishing out a September cut.”

The upcoming earnings calendar is relatively quiet to start the week, but traders will surely be busy starting on Thursday when Delta Air Lines (DAL) reports ahead of the opening bell. Morgan Stanley analyst Ravi Shanker says that DAL is one of the “cleanest stories” in airlines right now, citing Delta’s outsized exposure to corporate travel vs peers. The analyst rates DAL at Overweight (the equivalent of Buy), calling it a “top pick.”