U.S. stock-market indexes edged mostly higher on Friday after the July jobs report came in below expectations, though a drop in the unemployment rate and increases to the previous two months indicate the labor market remains healthy.
Investors also grappled with fresh news that China would retaliate with tariffs on $60 billion in U.S. goods, at a time when trade deficit rose for the first time in four months.
What are benchmarks doing?The S&P 500 SPX, +0.31% rose 4 points, or 0.2%, to 2,831, with seven of its 11 sectors trading higher. Consumer staples shares were leading the gains, up 1.4%. The benchmark index was on track for a 0.5% weekly gain.
The Nasdaq Composite Index COMP, -0.04% switched between small gains and losses, last trading 8 points, or 0.1%, lower at 7,794, taking a breather after a 1.2% rally fueled by Apple Inc.’s AAPL, +0.14% share advance on Thursday.
Apple made history on Thursday become the first U.S. company on Thursday to reach a valuation of $1 trillion, following its better-than-expected quarterly results.
The tech-heavy index is on track for a 0.7% weekly gain.
The Dow Jones Industrial Average DJIA, +0.36% advanced 76 points, or 0.3% to 25,400, but set to finish the week slightly lower.
What’s driving markets?Wall Street has been caught up in a battle between concerns over the U.S.’s trade spats with China and optimism over economic and quarterly earnings results that have been outstanding by most measures.
The market reaction to Friday’s July nonfarm payrolls report was largely muted. The annualized rate of wage gains was unchanged at 2.7%, suggesting no immediate pressure on inflation.
The Federal Reserve’s latest policy update affirmed the central bank’s plan to raise interest rates at least once more this year, and the jobs report wasn’t seen as likely to change that narrative. The central bank is next expected to raise interest rates in September.
Check out: U.S. jobs report for July likely to be another good one, but the real story is rising wages
What are analysts are saying?“The latest jobs reports means that the economy is chugging along, we are still adding jobs this late in the cycle while we had double-digit revenue and earnings growth,” said Michael Antonelli, equity sales trader at Robert W. Baird & Co.
“It looks as though the risk to trade wars is asymmetric to upside. All the bad news is priced in, but if we get some kind of resolution with China, then markets will rip higher,” Antonelli said.
What else is on investors’ radar?The trade deficit rose 7% in June to mark the first increase in four months, keeping the U.S. on track to post the largest annual gap in a decade even as the Trump White House escalates tariffs in an effort to bring it down.
The ISM non-manufacturing index in July slipped to 55.7%, underperforming consensus estimates.
Elsewhere, investors are watching signs of economic slowdown in China. A private gauge showed service sector activity in the country continued to grow in July, but at a slower pace than in June. China’s economy, already facing a slide, has been hurt by the tariff clash with the U.S.
Key Chinese equity index the Shanghai Composite SHCOMP, -1.00% fell 1%, while the Shenzhen Composite 399106, -1.72% declined by 1.7% after hitting a 3½-year closing low in the prior session.
Which stocks are in focus?Dish Network Corp. DISH, +12.69% soared 9%, after the satellite pay-TV service reported better-than-expected second-quarter earnings and revenue.
Kraft Heinz Co. KHC, +8.41% climbed 6.7% after reporting second-quarter earnings.
Shares of CBS Corp. CBS, -0.06% are lower after the media company late Thursday reported second-quarter earnings that came in below expectations but narrowly topped revenue forecasts for the quarter. CBS on Wednesday said its board of directors had hired outside lawyers to conduct an investigation into allegations that Chief Executive Les Moonves had sexually harassed women. Thursday’s earnings statement made no mention of Moonves’ status.
Shares of Groupon Inc. GRPN, +2.22% are down sharply after the company posted weaker-than-expected second-quarter results.
What are other markets doing?Oil futures CLU8, -0.68% reversed earlier gains and were trading 1% lower at $68.04 a barrel and on track to finish the week with losses. Meanwhile gold futures GCZ8, +0.27% rose 0.5%, to $1,225 after the jobs report and were on track to post a modest weekly gain.
The U.S. dollar index DXY, -0.07% dipped into negative territory after the employment data, last trading at 95.10, but was on track to finish the week slightly higher.
European stocks SXXP, +0.65% rose, while Asian markets finished mixed.
Providing critical information for the U.S. trading day. Subscribe to MarketWatch's free Need to Know newsletter. Sign up here.
