Mark Lennihan/AP
Traders work at the New York Stock Exchange, Friday, July 5, 2019 in New York.
- Stocks fell on Friday after the strong jobs report lowered expectations for an interest-rate cut from the Federal Reserve this month.
- The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite had rallied to all-time highs on Wednesday.
- The financials sector of the S&P 500 was the benchmark index's sole gainer, boosted by a rally in bank stocks.
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US stocks slipped from record levels on Friday after a stronger-than-expected jobs report dimmed expectations that the Federal Reserve will cut interest rates later this month.
All the three major indices had rallied to record highs during a shortened trading session Wednesday ahead of Independence Day.
Here's where they stood as of 12:07 p.m. ET:
- The S&P 500 fell 0.6% to 2,977.39.
- The Dow Jones Industrial Average fell 0.4% to 26,846.52.
- The Nasdaq Composite fell 0.7% to 8,116.61.
A report from the Labor Department showed that employers added 224,000 nonfarm payrolls in June, rebounding from an unexpectedly weak showing in May.
The robust gains prompted traders to revise their expectation that the Fed will cut interest rates to support the economy. According to the CME's FedWatch tool, the market still priced in a 100% probability of a cut in July. But the odds of a 50-basis-point reduction fell while those of a cut by 25 basis points rose.
"Fed watchers hoping for evidence for deeper rate cuts will likely be disappointed by this report which shows a relatively healthy labor market," said Daniel Zhao, a senior economist at Glassdoor, in a note Friday.
Within the S&P 500, here were the biggest losers:
- Electronic Arts tanked 6.3%
- Activision Blizzard dropped 3.6%
- Rockwell Automation fell -3.5%
Shares of Electronic Arts declined for a second-straight session after the company's second-season launch of "Apex Legends." Activision Blizzard, another video-game maker, also declined.
Rockwell Automation pared gains after a more than 10% rally in June, which was its largest monthly increase since January.
And here were the biggest gainers:
- Zions Bancorporation rose 2%
- Comerica climbed 1.8%
- Citizens Financial Group gained 1.8%
Bank shares including Zions Bancorporation and Citizens Financial Group rallied alongside interest rates; the yield on the 10-year note climbed back above 2%. Comerica continued to rebound from a 3% slump Tuesday after Goldman Sachs downgraded the financial-services firm to "sell" from "neutral."
Now read more markets coverage from Markets Insider and Business Insider:
After a strong jobs report, Wall Street expects a smaller rate cut from the Fed in July