US stocks trade higher on rate cuts hopes
New York: US stocks traded higher on Friday after weak jobs data fueled hopes that the central bank will cut its benchmark interest rates soon.
At midday, the Dow Jones Industrial Average increased 261.89 points, or 1.02 per cent, to 25,982.55. The S&P 500 rose 31.89 points, or 1.12 per cent, to 2,875.38. The Nasdaq Composite Index rose 125.83 points, or 1.65 per cent, to 7,741.38, the Xinhua news agency reported.
US job creation decelerated in May, with nonfarm payrolls edging up by only 75,000, the Labor Department reported on Friday. Economists surveyed by Dow Jones had been looking for a gain of 1,80,000.
The unemployment rate remained at 3.6 per cent for the month, the report said.
According to the report, monthly job gains have averaged 1,64,000 in 2019, compared with an average gain of 2,23,000 per month in 2018.
The weaker-than-expected jobs data increased the chance of more accommodative monetary policy from the Federal Reserve.
The central bank officials have already signalled possibility of having rate cuts.
Federal Reserve Chairman Jerome Powell said Tuesday that the Fed is watching current economic developments and will do what it must to keep the near-record expansion going.
He said while the Fed does not know how or when the issues involving trade negotiations and other matters will be resolved, the central bank is closely monitoring the implications of these developments for the US economic outlook.