US stocks experienced a volatile day on Thursday, initially advancing after a weaker-than-anticipated June employment report. This report showed a gain of 57,000 jobs, 48.2% less than consensus and a significant slowdown from May's revised 129,000 jobs. Despite this, the unemployment rate unexpectedly dropped to 4.2%. The dovish report led to a dip in the dollar and a surge in gold, with spot gold rising 2.45% to $4,128.69 per ounce and US gold futures up 1.74% to $4,139.20 per ounce, as it reduced the likelihood of an immediate Federal Reserve rate hike.
The major US indexes reacted positively early in the day. The Dow Jones Industrial Average rose 477.33 points, or 0.92%, to 52,786.09. The S&P 500 increased by 49.89 points, or 0.65%, to 7,531.95, and the Nasdaq Composite climbed 141.19 points, or 0.53%, to 26,177.28. Market analyst Peter Cardillo of Spartan Capital Securities described the report as a "Goldilocks report" given the lower-than-expected job growth combined with a falling unemployment rate and annual hourly wages at 3.5%.
Despite the initial gains, US stocks later gave up some of these advances, specifically due to a continued sell-off in chipmakers, which had been experiencing declines in previous sessions. This broader market movement was influenced by sustained concerns in the technology sector, particularly among semiconductor companies. The yuan also surged against the dollar following the soft employment data, with the dollar index falling 0.73% to 100.66, and the euro strengthening by 0.69% to $1.1455.
Oil prices also reacted to broader global developments, dipping to a four-month low. US crude fell 1.28% to $67.70 a barrel, and Brent crude dropped 1.08% to $70.81 per barrel. This decline was attributed to easing supply concerns after the conclusion of US-Iran talks. Federal Reserve Chair Kevin Warsh reiterated the central bank's 2% inflation goal and noted that war-related price pressure risks had decreased.
