The US stock market opened higher on Friday as investors analyzed a key jobs report that provided insights into the upcoming interest rate cut and the strength of the US economy. Tech stocks, including the Nasdaq Composite (^IXIC), rebounded from earlier losses and were up about 0.2% in early trading. The S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) also saw gains of around 0.2% each.
In August, the US economy added 142,000 jobs, falling short of the expected 165,000 jobs added. This data, along with a downward revision of previous month job growth numbers, signaled a cooling labor market. Despite this, the unemployment rate dipped back down to 4.2%.
This significant jobs report shifted expectations for the Federal Reserve to implement a more substantial rate cut at its upcoming meeting. Traders now see a 50-50 chance of a 50 basis point cut, which is a notable increase from earlier predictions.
Stocks experienced a turbulent week as they reacted to economic data to anticipate the size of the Fed’s rate cut. All three major indexes are on track for marked weekly declines.
In corporate news, chipmaker Broadcom’s (AVGO) shares declined in early trading due to a lackluster sales forecast. While the company is benefiting from increased AI spending, other divisions are not meeting expectations.
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