US stocks surge, S&P 500 rises above 6,000 points after jobs report

At the trading on June 6, the leading U.S. stock indices jumped by more than 1%. Investors' optimism was aroused by the fresh report on employment in the USA for May: it turned out to be better than expected. Analysts say that this is good news: the labor market is holding steady despite signs of slowdown against the backdrop of Donald Trump's duties. Nevertheless, they also warn: their more real impact on the state of the economy can be assessed only in the summer;

- The main U.S. stock index, the S&P 500, was up more than 1 percent after the start of tradingwas up, crossing the 6,000-point mark for the first time since late February.

- The blue-chip Dow Jones Industrial Average index at its peak added 1.5 percent to 42,924 points.

- The Nasdaq Composite index, heavily weighted toward technology companies, was also up more than 1 percent to 19,583 points.

- All of the «Magnificent Seven» stocks were in the plus: Tesla was the most expensive stock (up more than 6%), followed by Google's parent company, Alphabet (+2.5%). 

- The Russell 2000 index of small-capitalization companies added the most, rising 1.6% at its peak.

Investors reacted to fresh employment data for May, CNBC reports. The U.S. Department of Labor reported that in May in non-farm sectors of the economy created 139 thousand jobs, while the average forecast was 125 thousand, the channel notes with reference to Dow Jones data. The unemployment rate remained unchanged at 4.2%.

The statistics eased fears of a slowdown in the US economy amid US President Donald Trump's trade policies, CNBC explains. Nevertheless, the strong data may also delay interest rate cuts by the Federal Reserve, whose next meeting is scheduled for June 17-18.

«The jobs report was better than expected,» Anthony Saglimbene, chief market strategist at Ameriprise, said in an interview with CNBC. - It shows that the labor market is holding up very solidly despite some signs of slowing economic growth.» However, he added that questions still remain about the impact of duties on inflation. He said the effect of the new trade restrictions will start to show up more prominently in economic statistics in the summer. «Markets are still refraining from final conclusions, trying to understand how all this will affect growth and profitability in the coming quarters. In essence, we are back to where we were in February,» the strategist summarized.

«With the Fed focused on managing inflation risks, today's strong report is unlikely to change its cautious stance. We expect the Fed to keep the rate unchanged at its next meeting. Continued easing will likely require a more pronounced weakening in the employment data,» adds Lindsay Rosner, head of multi-sector bonds at Goldman Sachs.

«What does this mean for investors? A strong jobs report gives the Fed additional room to maneuver, allowing it to take its time in cutting rates. Although inflation is moving in the right direction and other central banks are cutting rates, the Fed is being cautious because of the possible effect of duties,» said Bret Kenwell, US investment analyst at eToro.

«Today's news is really good news, but the uncertainty around duties remains,» said Adam Hette, head of multi-asset strategies at Janus Henderson Investors. He said data coming out in the summer will be more indicative of understanding the state of the economy after the so-called «Emancipation Day.»

According to CME FedWatch, a tool for monitoring market expectations for the U.S. Fed Funds rate, 99.9% of traders don't expect a rate cut at the next meeting, and over 80% don't expect one in July either.