S&P 500 Hits 6,000 On Jobs Data, US-China Trade Talks Optimism
The S&P 500 closed above 6,000 on Friday for the first time since February as stronger-than-expected jobs data eased fears about a slowdown in the economy and as planned US-China trade talks revived investor optimism.
The S&P 500 Index, Nasdaq 100 and the Dow Jones Industrial Average all gained 1%. The Russell 2000 jumped 1.7%. Tesla Inc. led gains among the Magnificent Seven stocks with shares of the electric-vehicle maker rebounding 3.8% after a 14% plunge on Thursday, when a feud between Elon Musk and President Donald Trump devolved into a public war of words.
US and Chinese negotiators will resume trade talks on June 9 in London, Trump announced, as the world's two largest economies look to resolve a simmering dispute over tariffs and technology that has unnerved markets.
On the economic front, while the US payrolls report beat estimates, it did show job growth moderated in May and the prior months were revised lower, indicating employers are cautious about growth prospects as they weigh the Trump administration's economic policy. The unemployment rate held at 4.2%.
“Investors were worried about softness in labor market data today,” said Kevin Brocks, director of 22V Research. “Payrolls beat and the unemployment rate was flat which is bullish on the day.”
The S&P 500 has gained roughly 20% since its April lows as the latest round of corporate earnings and a still-resilient US economy support the bullish case for US equities.
“Today's report is obviously emboldening the bulls, particularly in a context of low positioning across institutional investors,” said Frank Monkam, head of cross asset macro trading at Buffalo Bayou Commodities.
From a technical prospective, the S&P 500 is approaching overbought territory, while participation is still light. Less than 60% of stocks are trading above their 200-day moving average.
If the 6,000 level is sustained on the index, the only level of resistance is the all-time high near 6,150, according to John Kolovos, chief technical strategist at Macro Risk Advisors. “Intermediate-term momentum is building, not yet overbought,” Kolovos said, adding that cyclical stocks, especially semiconductors, show strong positive trend reversals.
Meanwhile, BofA's Michael Hartnett is warning that global stocks are close to triggering sell signals as both fund inflows and market breadth are running too hot.
Among single stock movers, Robinhood Markets Inc. shares gained as investors speculated that the online brokerage could become the latest firm to earn a coveted spot in the S&P 500. Circle Internet Group Inc.'s shares rose 29%, the day after the stablecoin issuer more than doubled from the IPO price. In the consumer space, Lululemon Athletica Inc. shares fell 20% after its latest earnings report highlighted the risk posed by new tariffs and exacerbated concerns about slowing growth.
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