U.S. Stocks Finish Lackluster Session Little Changed Ahead Of Jobs Data

(RTTNews) – Following the rally seen over the course of Wednesday’s session, stocks turned in a relatively lackluster performance during trading on Thursday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing narrowly mixed.

While the Dow rose 78.84 points or 0.2 percent to 38,886.17, the Nasdaq slipped 14.78 points or 0.1 percent to 17,173.12 and the S&P 500 edged down 1.07 points or less than a tenth of a percent to 5,352.96.

The choppy trading on Wall Street came as traders seemed to take a step back to assess the outlook for the markets following Wednesday’s surge, which lifted the Nasdaq and the S&P 500 to new record closing highs.

Traders also stuck to the sidelines ahead of Friday’s closely watched monthly jobs report, which could have a significant impact on the outlook for interest rates.

The Labor Department report is expected to show employment increased by 185,000 jobs in May after climbing by 175,000 jobs in April, while the unemployment rate is expected to remain at 3.9 percent.

“Ironically, a slowing in the job market, and even an increase in unemployment, should be welcome to the extent that it alleviates some upwards pressure on inflation,” said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance.

He added, “But we are aware that too much weakness in the labor market and in the economy could eventually prove to be an even greater threat to markets than inflation that is 1-2% above the Fed’s target.”

A day ahead of the release of the monthly jobs report, the Labor Department released a report showing first-time claims for U.S. unemployment benefits rose by more than expected in the week ended June 1st.

The Labor Department said initial jobless claims climbed to 229,000, an increase of 8,000 from the previous week’s revised level of 221,000.

Economists had expected jobless claims to inch up to 220,000 from the 219,000 originally reported for the previous week.

Meanwhile, the Commerce Department released a report showing the U.S. trade deficit widened significantly in the month of April, as the value of imports jumped by much more than the value of exports.

The Commerce Department said the trade deficit surged to $74.6 billion in April from a downwardly revised $68.6 billion in March.

Economists had expected the deficit to widen to $76.1 billion from the $69.4 billion originally reported for the previous month.

While narrower than expected, the trade deficit in April marked the largest since the gap reached $75.3 billion in October 2022.

Sector News

While most of the major sectors ended the day showing only modest moves, gold stocks moved sharply higher, driving the NYSE Arca Gold Bugs Index up by 3.5 percent.

The rally by gold stocks came amid an increase by the price of the precious metal.

On the other hand, housing stocks came under pressure over the course of the session, dragging the Philadelphia Housing Sector Index down by 1.2 percent.

Airline stocks also showed a notable move to the downside on the day, with the NYSE Arca Airline Index falling by 1.2 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index advanced by 0.6 percent, while Hong Kong’s Hang Seng Index edged up by 0.3 percent.

The major European markets also moved to the upside after the European Central Bank lowered interest rates. While the U.K.’s FTSE 100 Index climbed by 0.5 percent, the French CAC 40 Index and the German DAX Index both rose by 0.4 percent.

In the bond market, treasuries recovered from modest early weakness to end the day slightly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 4.281 percent after reaching a high of 4.322 percent.

Looking Ahead

Trading on Friday is likely to be driven by reaction to the monthly jobs report and the impact on the outlook for the economy and interest rates.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.