Wall Street: Job market data causes euphoria on US stock exchanges – software stock rises by 35 percent
On Friday, investors are particularly snapping up chip manufacturers and software companies. US indexes are heading for their best stock market week since April.
A surprisingly weak US job market is causing euphoria on stock markets on both sides of the Atlantic. The US indices are heading for their best stock market week since April. On Thursday, the stock markets had closed unevenly. The Dow Jones index of standard stocks is almost unchanged and stands at 53,928 points. The broader S&P 500 is up 0.3 percent to 7,733 points.
The tech index Nasdaq Composite gains 0.8 percent to 26,561 points. The Nasdaq 100, which includes the 100 largest non-financial companies listed on the US technology exchange Nasdaq, is up 0.7 percent to 29,570 points.
The US job market did not develop as expected by economists in July. Surprisingly, the job market outside of agriculture shrank by 23,000 jobs. Economists had expected an increase of 80,000 jobs. These news cause euphoria among investors. This is because in the US, the job market has a direct impact on the monetary policy of the Federal Reserve (Fed).
The Fed has a dual mandate for stable prices and full employment. A weak job market increases pressure on the Fed to lower interest rates in order to support the economy and protect jobs. Recently, investors had assumed that interest rates would rise in the fall due to rising energy prices and the uncertainty caused by the Iran war regarding economic developments.
According to the Fed Watch tool CME, a majority of investors do not expect any changes in September, and almost 60 percent expect a rate hike in October. Currently, the interest rate range is 3.5 to 3.75 percent. In the previous meeting, the Fed had left its interest rates unchanged.
Translated by urgent.news from Handelsblatt's report; automated translation may contain errors. Machine-written — it may contain errors, so check the original before relying on it.
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