S&P 500 Ends At Record High, Clocks Strongest Week Since April As Poor Jobs Data Calms Rate Hike Fear — SEZL, SPCX, RDW, PLTR, TTD In Focus

• The S&P 500 ended 0.6% higher, the Nasdaq 100 jumped 1.2%, while the Dow Jones Industrial Average added 0.3%.
• The unemployment rate fell to 4.1%, while the labour force participation rate dropped to its lowest level in more than five years.
• Palantir was the top weekly gainer in the S&P 500 while Trade Desk dropped to the bottom. 

US stock indices ended higher on Friday as weak jobs data led traders to price in deferred rate hikes by the Federal Reserve. 

The S&P 500 ended 0.6% higher, the Nasdaq 100 jumped 1.2%, while the Dow Jones Industrial Average added 0.3%. The Russell 2000, which tracks stocks with small market capitalizations, fell 0.6%.

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) ended 0.6% higher, and Invesco QQQ Trust (QQQ) ended Friday 1.1% higher, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.2%.

Tech, chipmakers and broader AI stocks jumped on Friday following the release of the jobs report. As bets for a more dovish Fed rose, broader tech stocks jumped as they generally perform better in a low interest rate scenario as they are valued based on future earnings. 

The VanEck Semiconductor ETF (SMH) added 2% on support from Broadcom (AVGO), ASML Holdings (ASML) and Nvidia (NVDA), while the broader Vanguard Information Technology ETF (VGT) added 1.5%.

Retail sentiment on Stocktwits for SPY and QQQ was ‘bearish’ and ‘neutral’ for the DIA, with ‘high’ message volumes.

US Market Drivers

According to the nonfarm payrolls report for July, the economy shed 23,000 jobs, contrasting sharply with the 83,000 gain projected by Dow Jones economists. Meanwhile, the unemployment rate ticked down to 4.1% as the labor force participation rate reached its lowest mark in over five years, defying expectations that it would hold steady at 4.2%.

Following this substantial jobs miss, most fed funds futures traders now anticipate that the Federal Reserve will maintain its key lending rate between 3.50% and 3.75% during the upcoming September policy meeting, according to data from the CME FedWatch tool. 

This marks a major shift from just one day prior, when market participants were pricing in a 55% probability of a 25-basis-point rate increase. Consequently, a large portion of traders expect the central bank to pause its tightening cycle.

“While one weak jobs report is not likely to dictate Federal Reserve policy, we think the central bank will maintain its wait-and-see approach on interest rates, and allow more time to pass to examine incoming economic data,” Brent Wilsey, chief investment officer at Wilsey Asset Management, told Bloomberg in an interview.

Meanwhile, the S&P 500 jumped to its best week since April this year owing to a host of stellar corporate earnings. Palantir (PLTR) was the top weekly performer and Trade Desk (TTD) fell to the bottom. 

Trending Stocks To Watch 

Sezzle (SEZL): The company’s stock plunged 34% on Friday, extending losses from the previous session’s after-hours selloff and clocking its worst day in a year, as investors weighed a more cautious growth outlook for the rest of the year despite a strong quarterly beat. 

Redwire Corp. (RDW): Asset manager State Street disclosed a passive stake of 7.3% in the space infrastructure company, adding to the recent investor optimism following a strong quarterly earnings report earlier this week. 

Celsius Holdings (CELH): The stock climbed around 12% on Friday, recovering partially from a steep sell-off a day earlier triggered by weaker-than-expected quarterly results, as Russ Savage, the billionaire founder of Rockstar Energy, disclosed a significant stake in the company. 

SpaceX (SPCX): Investors looked past the recent lock-up expiration fears, while an upgrade by Argus highlighted confidence in the rapid returns from its AI investments. 

AeroVironment Inc. (AVAV): The company is set to win a U.S. Army contract worth at least $400 million for its Locust counter-drone laser system. 

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