Stock Market News | Wells Fargo Investment Institute

Closing Comment — Friday, June 02, 2023

DJIA: 33,762.76, up 701.19
S&P 500: 4,282.37, up 61.35
NASDAQ: 13,240.77, up 139.79

Stocks surge on jobs and debt-ceiling deal

U.S. equity markets rallied on Friday as investors celebrated a strong May jobs report and the U.S. Senate’s (with a 63-36 majority vote) passing of debt-ceiling legislation, averting a default. The bill is now headed to the White House to be signed into law. Bond yields also rose on Friday’s robust payroll figures. On the data front today, non-farm payrolls added 339,000 new jobs in May, exceeding the consensus forecast of 195,000. Upward revisions for March and April underscored May’s stronger-than-anticipated data. The unemployment rate ticked up last month to 3.7% from 3.4% in April, exceeding consensus expectations. Meanwhile, the labor force participation rate was unchanged in May at 62.6%, matching expectations. Today, the Dow surged by 701 points (2.1%) while the Nasdaq Composite climbed 1.1% for its sixth consecutive week of gains. The S&P 500 increased 1.5% with all 11 sectors finishing in positive territory.

Treasury yields across the yield curve moved higher. The yield on the benchmark 10-year note rose by nine basis points (0.09%) to 3.69%, while the 30-year bond yield increased by six basis points (0.06%) to 3.88%. The yield on the two-year note jumped by 16 basis points (0.16%) to 4.50%. In commodities, West Texas Intermediate (WTI) crude advanced 2.7% to $71.98/barrel following news that the U.S. Congress passed a debt-ceiling deal ahead of the Organization of Petroleum Exporting Countries and their allies (OPEC+) meeting this weekend.

Opening Comment — Friday, June 02, 2023

DJIA: 33,061.57, up 153.30
S&P 500: 4,221.02, up 41.19
NASDAQ: 13,100.98, up 165.69

Stocks higher on passage of debt ceiling bill

U.S. equity futures are slightly higher Friday after the debt-ceiling deal passed its last Congressional hurdle, with traders now looking to U.S. jobs data later today that may clarify the Federal Reserve’s (Fed) policy path. This morning, the Dow is up 0.5% in pre-market trading, while the S&P 500 is 0.5% higher. The Nasdaq 100 is trading 0.5% above fair value on the GLOBEX.

U.S. equities finished higher on Thursday led by strength of technology companies and optimism on a debt ceiling suspension. Bond yields fell ahead of Friday’s job reports and a Fed speaker indicating a possibility to pause interest rate hikes in the upcoming June meeting. On the data front, initial jobless claims and continuing claims both rose less than expected. The May Institute for Supply Management (ISM) Manufacturing data came in weaker than expected as well showing signs of the economy slowing. Yesterday, the Dow increased 153 points (0.5%) while the Nasdaq Composite climbed 1.3%. The S&P 500 increased 1.0% with nine of 11 sectors finishing in positive territory.

On the data front today, On the data front today, non-farm payrolls increased by 339,000 in May versus the revised 294,000 in April, exceeding the consensus forecast of 195,000. The unemployment rate ticked up to 3.7% from 3.4% in April, exceeding consensus expectations. Meanwhile, the labor force participation rate was unchanged in May at 62.6%, matching expectations.

Over in the commodity pits, West Texas Intermediate (WTI) crude is up 1.63% to $71.24/barrel after the U.S. averted a debt default and ahead of this weekend’s Organization of Petroleum Exporting Countries (OPEC) meeting. In the metals complex, gold is up slightly at $1980.50/ounce.

Across the pond, European stocks are climbing in mid-day trading after U.S. lawmakers passed a bill to raise the debt ceiling and cap government spending for two years. Overnight in Asia, shares in Japan, Australia, and China advanced while South Korea’s Kospi index was headed for bull market territory following a gain of more than 20% from a low in September. Hong Kong’s Hang Seng index rose more than 4%, pulling the benchmark back from the brink of a bear market following concerns about Chinese growth. China is working on a new basket of measures to support the property market after existing policies failed to sustain a rebound in the ailing sector. In FOREX trading, the U.S. dollar declined on Friday against a basket of major currencies as traders anticipate a Fed pause.

Investment Implementation ("II") is a team within Wells Fargo Investment Institute, Inc. (WFII). WFII is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.

The information in this report was prepared by Investment Implementation. Opinions represent II's opinion as of the date of this report and are for general information purposes only and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally. II does not undertake to advise you of any change in its opinions or the information contained in this report. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report. The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor.

This report is not intended to be a client-specific suitability or best interest analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. The material contained herein has been prepared from sources and data we believe to be reliable but we make no guarantee to its accuracy or completeness.

Wells Fargo Advisors is registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered with any financial services regulatory authority outside of the U.S. Non-U.S. residents who maintain U.S.-based financial services account(s) with Wells Fargo Advisors may not be afforded certain protections conferred by legislation and regulations in their country of residence in respect of any investments, investment transactions or communications made with Wells Fargo Advisors.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.