Wall Street stocks ticked up at the open, as fresh US unemployment data pointed to a cooling economy, putting pressure on the Federal Reserve to end its tightening campaign sooner.
The benchmark S&P 500 rose 0.1 per cent while the tech-heavy Nasdaq Composite added 0.3 per cent at the opening bell.
Investors returned to tech, with the NYSE Fang+ index of 10 highly traded tech stocks rising 0.3 per cent, having pared its losses from the previous session.
“Everything is slowing and all earnings will come down, but where will they come down less? That’s usually growth companies, quality, maybe income, definitely large-cap”, said Marija Veitmane, senior multi-asset strategist at State Street Global Markets.
The moves come after the US labour department reported that new applications for unemployment aid, a proxy for job cuts, climbed more than expected last week, hitting their highest level since October 2021.
Initial state unemployment claims totalled 261,000 in the week ending June 3, up 28,000 from the previous week’s revised level, signalling that high interest rates were beginning to take a toll on the country’s businesses.
The Fed is due to hold its policy meeting next week, with markets pricing in a 76.6 per cent chance that policymakers will resist raising interest rates this month.
The yield on the policy-sensitive two-year Treasury note fell 0.03 percentage points to 4.52 per cent, and the yield on the 10-year note was flat at 3.79 per cent. Bond yields fall as prices rise.
Meanwhile, Europe’s region-wide Stoxx 600 and Germany’s Dax rose 0.1 per cent, while France’s Cac 40 added 0.3 per cent.
Downwardly revised figures released on Thursday showed that the eurozone economy shrank in the past two quarters, with the bloc’s output having declined at a quarterly rate of 0.1 per cent in both three-month periods.
The new reading could weigh on European Central Bank policymakers, due to meet the day after the Fed’s rates decision next week, who have previously signalled that the economy’s resilience would give them room to raise the deposit rate above its current 3.25 per cent.
In Britain, the yield on the two-year gilt fell 0.05 percentage points to 4.52 per cent, retreating after it almost hit a peak last seen in the aftermath of September’s “mini-Budget”.
Asian equities ticked up, with Hong Kong’s Hang Seng index adding 0.1 per cent and China’s CSI 300 gaining 0.8 per cent. Japan’s Topix bucked the trend, falling 0.7 per cent.
