• Dow Jones gains 400-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) climbed 1.15% 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 over 1% on Friday, dragged higher by a smattering of technology stocks while the downside remains relatively capped. Amgen Inc. (AMGN), a biotech firm, soared 12.5% on the day, gaining around 45 points to trade above $313.00 per share. Amgen was followed by Apple Inc. (AAPL), climbing 7% on Friday to gain 12 points and trade above $185.00 per share.

On the low side, Chevron Corp. (CVX) fell -1.12%, shedding -1.8 points and falling below $160.00 per share. McDonald’s Corp. (MCD) also shed -1.0% as forward guidance warns of declining sales. McDonald’s fell -1.0%, losing 3 points and trading into $270.00 per share.