Weaker-than-expected July payrolls data eased rate hike fears, lifting equities with tech and materials sectors leading gains.
The S&P 500 closed 0.62% higher for the week, driven by gains in technology and materials sectors, as July’s nonfarm payrolls report showed a surprise contraction in employment. The Dow and Nasdaq also advanced, rising 0.3% and 1.0%, respectively, on Friday’s session.
July’s payrolls data fell short of economist expectations, with job growth slowing more than anticipated. The prior month’s figures had shown steady hiring, while consensus forecasts had projected continued expansion. The report’s weakness fueled speculation that the Federal Reserve may pause further interest rate increases.
Equities reacted positively to the data, with investors interpreting the softer labor market as a potential signal of cooling inflation pressures. Sector performance was led by technology and materials, reflecting optimism about lower borrowing costs and economic resilience.