Investing.com — The S&P 500 closed the week higher despite closing lower on Friday following a sharp rise in Treasury yields after a stronger-than-expected jobs report cooled optimism about earlier, sooner later rate cuts by the Federal Reserve.
At 4:00 PM (8:00 PM GMT), the price closed 0.1% lower after hitting an intraday record high of 5,375.65, falling 0.3% and falling 87 points, or 0.2%.
Treasury yields are rising as strong nonfarm payrolls hurt interest rate cuts
Treasury yields rose sharply after data showed the U.S. economy added more jobs than expected last month, rising to 272,000 in May, up from the revised lower release of 165,000 in April. Economists had called for a reading of 182,000.
grew by 0.4% month-on-month, up from 0.2% in April and above projections of 0.3%, fueling new inflation concerns as it rose to 4.0%, above the expected 3.9%.
Signs of strength in the labor market forced traders to adjust their bets on September interest rates, which now stand at 45%, according to Investing.com’s Fed Rate Monitor Tool, up from 55% a day earlier, just before the meeting from the Fed next week.
“The FOMC is widely expected to leave policy unchanged next Wednesday,” economists at Scotiabank said, adding that they expected the Fed to lower its forecast on rate cuts for this to two cuts, from three previously. “A cut in September remains our base case for the first step this year,” it added.
“We are impressed by the strong performance, which reaffirms our belief in the long-term strategy for sustainable growth and margin expansion [for Samsara]Truist Securities said in a note, but said that “at current valuations, we cannot justify putting new money to work at current prices.”
GameStop drops after weak first quarter
In the corporate world, shares of GameStop (NYSE:) fell 39% after the video game retailer reported weaker-than-expected first-quarter results and said it would sell an additional 75 million shares.
Samsara Inc (NYSE:) fell 11% even as the software maker reported better-than-expected first-quarter results, with some on Wall Street wary of its current valuation.
Software company DocuSign (NASDAQ:) fell more than 5% even as it delivered better-than-expected first-quarter earnings and inline guidance for the second quarter.
On the other hand, Lyft (NASDAQ:) closed 0.6% lower after the ride-hailing company announced it expected gross bookings to grow about 15% annually over the next three years.
(Peter Nurse, Ambar Warrick contributed to this article.)
