Wall Street's three main indexes closed higher on Friday as investors evaluated an unexpected decline in U.S. jobs during July. Investors viewed the labor data as a sign that the Federal Reserve will not raise interest rates soon, keeping its monetary policy unchanged for now.
The Dow Jones Industrial Average added 0.28 percent to close at 54,036.93 points. The S&P 500 rose 0.62 percent to 7,757.64 points, while the Nasdaq Composite gained 1.3 percent to end at 26,690.62 points. On a weekly basis, Wall Street recorded its second consecutive positive week and its best performance since April, with the S&P 500 gaining over 3 percent, the Nasdaq jumping 5 percent, and the Dow Jones adding about 3 percent.
Software and travel stock gains
Software stocks set the tone for the trading session. Cybersecurity company Cloudflare added 5.78 percent after issuing optimistic forecasts for both the full year and the current quarter. Atlassian surged 35 percent after its adjusted fourth-quarter earnings and revenue exceeded analyst estimates, alongside positive forward forecasts. Airbnb also advanced 17 percent following financial results that topped market expectations for both revenue and profits.
U.S. employment figures and rate outlook
The U.S. economy unexpectedly lost 23,000 non-farm payroll jobs in July, defying a Dow Jones survey of economists that expected an increase of 83,000. Data for June was sharply revised down to an addition of 20,000 jobs instead of the initial 57,000 estimate, while May figures were revised downward by 66,000 jobs from 139,000 to 63,000. Despite the overall job losses, the unemployment rate edged down slightly to 4.1 percent, compared to expectations that it would hold at 4.2 percent.
Following the data release, most investors expected the Federal Reserve to keep its benchmark borrowing rate in the range of 3.50 percent to 3.75 percent at its September meeting, according to the CME FedWatch tool. Speaking to CNBC, Nuveen Chief Investment Officer Saira Malik said the employment numbers do not suggest prosperity and may signal a slowdown. Malik added that bond yields and inflation remain the biggest market concerns, noting that weaker economic data does not support the argument for another rate hike.
