U.S. stock markets closed the week on a high note, driven by a stronger-than-expected jobs report and renewed optimism over U.S.-China trade relations. The S&P 500 surged past the 6,000 mark for the first time since February 21, buoyed by tech sector gains, while the Nasdaq and Dow Jones also posted impressive rallies.
The U.S. nonfarm payroll report revealed an addition of 139,000 jobs in May, outpacing forecasts of 130,000. The unemployment rate held steady at 4.2%, reassuring investors that the economy remains resilient despite recent trade uncertainty.
These positive signs dampened expectations of immediate Federal Reserve rate cuts, with markets now predicting a possible rate reduction in September and only one more by the end of the year.
Meanwhile, hopes for a U.S.-China trade breakthrough were revived after President Donald Trump confirmed that three U.S. cabinet officials would meet their Chinese counterparts in London on June 9 to discuss a potential trade deal. While previous talks between Trump and China’s President Xi Jinping left some issues unresolved, the market responded positively to this renewed dialogue.
“The market will chase the trade deal carrot any time it’s available. The trick is whether any actual deal gets done,” said Jamie Cox of Harris Financial Group.
Among individual stocks, Tesla rebounded 3.8% after Thursday’s steep 15% decline amid a public dispute between Trump and CEO Elon Musk, including threats to cut federal contracts with Musk’s companies.
Other megacaps also saw gains: Amazon rose 2.7%, Alphabet gained 3.25%, and Wells Fargo climbed 1.9% following a credit outlook upgrade by S&P Global.
However, not all earnings news was upbeat. Broadcom dropped 5% after issuing a revenue forecast that underwhelmed investors, and Lululemon plunged 19.8% after slashing its annual profit guidance, citing increased costs due to tariffs.
Despite some losers, the market breadth was broadly positive:
- On the NYSE, advancing stocks outnumbered decliners by more than 2-to-1.
- On the Nasdaq, the ratio was even stronger at 2.52-to-1.
- The S&P 500 recorded 20 new 52-week highs, while the Nasdaq saw 86.
Trading volume was lighter than average, with 14.5 billion shares exchanged compared to the 20-day average of 17.8 billion.
Weekly performance wrapped up with:
- S&P 500 up 1.5%
- Dow Jones up 1.17%
- Nasdaq leading at 2.18%
With strong data, calming economic signals, and rekindled China talks, investors now look to the Fed’s upcoming meeting and next week’s trade discussions in London to set the tone for the summer.
