Tesla, Apple, Nvidia Boost Nasdaq to Record High as Jobs Report Ignites Fed Rate Cut Hopes

The most recent jobs report rekindled investors' expectations that the Federal Reserve will reduce interest rates, which led to the S&P 500 index reaching a new high on Friday and hitting a record closing.

The Nasdaq Composite finished the day with a gain of 0.90%, reaching 18,352.76, while the broad market index ended the day with an increase of 0.54%, reaching 5,567.19. During the session, both indexes set all-time highs and finished at records, with the S&P 500 marking its 34th record close in 2024. Both indices ended at records. With a final value of 39,375.87, the Dow Jones Industrial Average finished with a gain of 0.17%, or 67.87 points, as per CNBC.

Investors are betting that any economic downturn later this year will be greeted by a rate decrease from the Federal Reserve, which has resulted in the S&P 500 posting its fourth positive week in the last five weeks. The S&P 500 has grown by 16.7% this year, while the Nasdaq has gained 22.3%.

The unemployment rate rose to 4.1%, a tiny increase, but nonfarm payrolls increased by 206,000 throughout June, according to labor data issued on Friday morning and widely observed. According to economists, the unemployment rate will likely remain unchanged at 4%.

The data resulted in decreased Treasury yields, as investors anticipated that the Federal Reserve would reduce interest rates later this year in response to the increase in unemployment. According to the FedWatch Tool made available by the CME Group, investors increased their wagers on a reduction in the interest rate in September. The odds of a quarter-point decrease increased to approximately 77%, an increase from 64% a week ago.

“On one hand, the downward revisions to prior months and the rise in the unemployment rate raises the odds of a September Fed rate cut — bond markets are certainly celebrating this. But those same figures cannot help but prompt a twinge of concern about the direction of the U.S. economy. The broad host of economic data all point to a softening — today’s report adds to that picture,” Seema Shah, chief global strategist at Principal Asset Management, stated.

While Apple shares reached a new all-time high, Tesla's stock increased by more than two percent, resulting in a staggering gain of around twenty-seven percent for the week. Almost two percent of Nvidia's stock fell after the company received a rare downgrade from Wall Street, which cited limited potential for the chipmaker. The stock continued to show a weekly gain of approximately 1.9%.

With the week coming to a close, all three major indices were in the green. The Nasdaq Composite index rose by 3.5% during the period in question, while the S&P 500 index increased by about 2%. The Dow Jones fell short of expectations, adding around 0.7%. In observance of Independence Day, the markets were closed on Thursday.

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