NEW YORK (AP) — Most U.S. stocks are rising Thursday after the latest update on the job market suggested the Federal Reserve may feel less pressure to hike interest rates. But more swings for chip stocks and other winners of the artificial-intelligence boom are keeping indexes mixed.
The S&P 500 added 0.3% and is on track to close out its best week in nearly two months ahead of Friday's holiday for Wall Street. The Dow Jones Industrial Average was up 468 points, or 0.9%, as of 11 a.m. Eastern time, and the Nasdaq composite was 0.2% lower after erasing an early gain.
Stocks got some help from easing Treasury yields in the bond market, which fell after a report from the U.S. government said employers added 57,000 jobs to their payrolls last month. That’s growth, which is good for the economy, but it was also short of the 100,000 jobs that economists expected and a slowdown from May’s hiring pace.
The weaker-than-expected result could keep pressure off inflation, which has been accelerating worldwide because of jumps in oil prices caused by the war with Iran. And if inflation slows in upcoming months, now that oil prices are back below where they were before the war, the Federal Reserve may feel less need to raise interest rates several times this year.
That would be a relief for investors, who tend to love lower interest rates because they can give the economy a boost by making it cheaper for U.S. households and businesses to borrow money and spend. Lower rates also tend to push upward on prices for stocks and other investments.
The yield on the 10-year Treasury got to 4.50% in the morning, up from 3.97% just before the war. But after the release of the U.S. hiring data, it immediately fell back to 4.47%.
The two-year Treasury yield, which more closely tracks expectations for the Fed, fell more sharply. Traders now see an 82% chance that the Fed and its new chairman, Kevin Warsh, will not raise the federal funds rate at its next meeting later this month. That’s up from the 71% chance seen a day earlier, according to data from CME Group.
“The labor market isn’t overheating,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. He said the data could allow the Fed to wait through the summer to get more clues about how inflation is behaving before having to decide on hiking rates.
Hopes for lower interest rates particuarlly help prices for investments seen as the most risky. Bitcoin climbed roughly 3% above $61,500, a day after dropping near its lowest level since 2024.
That helped stocks of companies across the crypto industry. Robinhood Markets rose 6.4%, Coinbase Global gained 5.2% and Strategy rallied 8.8%.
Elsewhere on Wall Street, the company behind LaCroix sparkling waters climbed 13.2% after National Beverage said it will pay a special dividend of $3.25 for each share that investors hold.
It was a widespread rally for U.S. stocks, with seven out of every 10 stocks rising within the S&P 500.
But more drops for computer chip companies weighed on indexes. They’ve been under pressure on worries that their stock prices shot too high in the frenzy around AI and that all the spending on chips and data centers may not result in as much profit and productivity growth as hoped.
Memory maker Micron Technology erased an early gain to drop 3.7%, a day after plunging 10.6%. Applied Materials fell 6.6%, and Advanced Micro Devices sank 3.8%. They were some of the heaviest weights on the S&P 500 because they've grown so huge amid AI mania.
In the oil market, prices continued to sink on hopes for negotiations for a permanent end to the war with Iran. Brent crude, the international standard, fell 1.1% to $70.78 per barrel.
In stock markets abroad, indexes fell sharply in several Asian markets. South Korea's Kospi index dropped 7.9% due to losses for chip companies like SK Hynix. That’s its worst drop since a 10% plunge a little more than a week ago.
Indexes also fell 2.5% in Tokyo and 2% in Shanghai.
European indexes were stronger, and France’s CAC 40 rallied 1.8%.
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AP Business Writers Chan Ho-him and Matt Ott contributed to this report.
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