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• Dow Jones gains 460-plus points as investors raise bets on rate cuts.
• US data broadly softer on key labor print.
• Tech stocks dragging Dow Jones higher.

The Dow Jones Industrial Average (DJIA) gained nearly 1.2% on Friday after a broad miss from US Nonfarm Payrolls (NFP) and other key labor data revealed a steep weakening in the US domestic economy, sparking increased bets of rate cuts from the Federal Reserve. The US added fewer jobs than expected in April, and the Unemployment Rate ticked higher. The ISM Services Purchasing Managers Index (PMI) also fell to a 16-month low as economic activity confirms a steepening economic slowdown.

Markets are counter-intuitively betting against the US economy, bidding equities broadly higher as economic data begins to deteriorate. According to the CME’s FedWatch Tool, rate markets now see a 64% chance of at least a quarter-point rate cut at the Fed’s September meeting.

Softer jobs and wages figures boost rate cut hopes

April’s NFP labor report showed the US added 175K net new jobs over the month, below the forecast 243K. The previous month saw an upside revision to 315K from 303K. Average Hourly Earnings in April grew by 0.2% MoM, below the expected 0.3%. ISM Services PMI unexpectedly fell to a 16-month low of 49.4, below the key contractionary 50.0 level and missing the forecast increase to 52.0 from 51.4.

The single thorn in the side of rate cut hopes came from ISM Services Prices Paid in April, which climbed back up to 59.2 from the previous 53.4 as inflationary pressures continue to plague the domestic US economy.

Dow Jones news

The Dow Jones climbed 1.18% on Friday, dragged higher by a smattering of technology stocks while the downside remains relatively capped. Amgen Inc. (AMGN), a biotech firm, soared almost 12% on the day, gaining around 33 points to trade above $310.00 per share. Amgen was followed by Apple Inc. (AAPL), climbing 6% on Friday to gain 10.35 points and trade above $183.00 per share.

McDonald’s Corp. (MCD) lead the losers into the red on Friday, shedding -1.08% as forward guidance warns of declining sales. McDonald’s lost nearly 3 points and traded into $270.00 per share at the closing bell.

Dow Jones technical outlook

The Dow Jones Industrial Average climbed to an early session high of 38,840.05 after markets drove higher on the US’ latest NFP labor print, gaining ground from the day’s early low bids of 38,345.60. Equities are trading into the top half of the day’s price action as the DJIA looks to wrap up Friday near 38,800.00.

Friday’s bullish momentum takes the Dow Jones back above the 50-day Exponential Moving Average (EMA) at 38,435.55. Long-term price action still rests in the hands of bulls as the DJIA trades north of the 200-day EMA at 36,800.58.

Dow Jones five-minute chart
 

Dow Jones daily chart
 

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