Wall Street opens mixed after US unemployment rate rises

Wall Street opened on Friday in mixed territory, with the Dow Jones Industrial Average, its main indicator, down 0.08% to 39,275 points, as investors analysed the latest employment data and the rise in the unemployment rate in June.

Ten minutes after the market opened, the S&P 500 index was up 0.09% to 5,542 points, while the Nasdaq technology index was up 0.31% to 18,244 points.

The unemployment rate in the United States rose by one-tenth in June and stood at 4.1%, according to data published this Friday by the Bureau of Labor Statistics (BLS).

In the sixth month of the year, 206,000 net jobs were created, 12,000 fewer than in May; even so, this is still a very solid figure at a time when the Federal Reserve (Fed) is closely monitoring this data to see when it starts to lower interest rates.

This is the third consecutive month in which the unemployment rate has risen and 4.1% is the highest rate since November 2021, although analysts still consider it low and believe it confirms the strength of the US labor market.

Analysts are hopeful that rising unemployment will prompt the Fed to cut interest rates soon: According to CME Group’s Fedwatch tool, analysts see a 70% chance the central bank will begin cutting rates in September.

Following the report’s release, the benchmark 10-year Treasury bond yield fell to 4.307%.

By sector, the communications sector (0.97%) and the technology sector (0.26%) led the gains, while the energy sector (-0.46%) and the industrial sector (-0.39%) recorded the biggest losses.

Among the 30 Dow stocks, the most notable gainers were Amazon (1.11%) and Salesforce (1.09%), as well as the decliners Walt Disney (-0.95%) and Dow (-0.74%).

On other markets, the price of West Texas Intermediate (WTI) crude oil opened on Friday with a slight drop of 0.05% to $83.84 a barrel. Traders are now analysing the possibility that last week’s fall in inventories in the United States will mean a rise in demand.