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US stocks slip as strong jobs report keeps the Fed on pace for more rate hikes

Phil Rosen   

US stocks slip as strong jobs report keeps the Fed on pace for more rate hikes
  • US stocks dropped Friday, as investors took in a strong jobs report.
  • Nonfarm payrolls increased 372,000 in June, above expectations, which clears the way for more Fed rate hikes.

US stocks dropped Friday as the June jobs report came in above expectations, clearing the way for more aggressive rate hikes from the Federal Reserve.

Nonfarm payrolls increased 372,000 for June, according to the Bureau of Labor Statistics, well above Dow Jones' estimate of 250,000 and carrying on this year's trend of strong job growth.

"While many participants were looking for a broader slowdown in hiring last month, the reality is the demand for labor remains strong and absent a meaningful decline in hiring, it is hard to envision the economy is on the brink of recession," said Charlie Ripley, senior investment strategist at Allianz Investment Management. "Overall, today's report simply means the Fed still has more work to do with regards to policy rates to cool demand in the economy and a 75 basis point rate hike is almost a certainty at this point."

The tech-heavy Nasdaq is up roughly 4.4% on the week, and the Dow Jones Industrial Average is up about 0.92%, with both indexes are on track for their second positive week out of the last three.

Here's where US indexes stood as the market opened 9:30 a.m. on Friday:

Mortgage rates posted their biggest weekly fall since 2008, providing a minor relief to buyers, according to Freddie Mac. The average rate on the 30-year fixed rate loan fell to 5.3%, down from 5.7% last week, Thursday data shows.

Twitter shares dropped 4% Friday after a report from the Washington Post said that Elon Musk's buyout deal was in "serious jeopardy."

Warren Buffett's Berkshire Hathaway bought another $700 million of Occidental Petroleum stock, bringing the firm's total stake in the energy giant to $11 billion.

Meanwhile, Goldman Sachs forecasted that oil will hit $140 a barrel thanks to overplayed recession risks. Over the past month, crude has tumbled over 15%, though the bank said commodities investors are worrying too much about a recession.

Overseas, Europe has ramped up liquefied natural gas imports by nearly 50% this year, but poorer countries have struggled to get enough of the fuel amid war in Ukraine and a worsening energy crisis. Nations like Bangladesh, India, and Brazil have all had to cut imports as Europe does the opposite.

Oil inched higher, with West Texas Intermediate up 0.57% to $103.44 a barrel. Brent crude, the international benchmark, moved up 0.77% to $105.40 a barrel.

Gold edged lower 0.155% to 1,736.30 per ounce. The 10-year yield rose 6.3 basis points to 3.071%.

Bitcoin fell 1.18% to $21.372.01.


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