Dow Rises After Weak June Jobs Report Lowers Rate Odds

The Dow Jones Industrial Average gained 256 points on Thursday after a weaker-than-expected June jobs report. The nonfarm payrolls data showed the U.S. economy added 57,000 jobs and the unemployment rate was 4.2%, reducing market expectations for another Federal Reserve rate increase this year.

U.S. stocks closed higher after the payrolls print. The S&P 500 rose 0.39% and the Nasdaq Composite added 0.24%. Economists had expected a stronger jobs gain, with forecasts near 110,000 to 115,000, making the 57,000 result a notable shortfall.

The softer labor data pushed Treasury yields lower, with the two-year note seeing the largest declines as investors priced in a lower chance of near-term Fed tightening. Data from LSEG showed the probability of at least one Fed rate hike this year fell to about 75.6%, down from roughly 84% before the payrolls release.

Federal Reserve Chair Kevin Warsh earlier this week noted that inflation risks had eased and reiterated the central bank’s commitment to a 2% inflation target. Market strategists said the employment report may have been affected by temporary factors, increasing the focus on upcoming inflation readings. Julien Lafargue, chief market strategist at Barclays Private Bank, noted, “Markets are likely to place greater weight on the June CPI report due on July 14, as inflation data will offer a cleaner read on the economy.”

Within U.S. equities, some technology names recovered from earlier losses. Micron Technology rose about 2% and Arm Holdings advanced 0.46%. Intel and AMD fell 0.92% and 1.83%, respectively. Smaller stocks showed volatility: Bending Spoons dropped roughly 3% a day after the Vimeo owner surged in its Nasdaq debut.

Global markets moved unevenly. South Korea’s Kospi plunged 7.89% to its lowest close since early June and the Kosdaq fell 6.74%, with Samsung Electronics down 9.06% and SK Hynix off 14.57%. Japan’s Nikkei 225 lost 2.47% while the broader Topix edged up 0.09%. Australia’s S&P/ASX 200 finished little changed. In Europe, the pan‑European Stoxx 600 recovered from early weakness and rose about 0.6% as investors rotated into defensive sectors including utilities, healthcare and consumer staples.

Investors also monitored geopolitical developments after the United States and Iran completed another round of indirect talks without signs of a breakthrough toward a lasting settlement. Traders cited the talks as an additional source of uncertainty for risk sentiment.

With the payrolls report weaker than expected and Fed tightening odds reduced, market attention has shifted to the consumer price index due on July 14 for a clearer sense of inflation trends and potential central bank policy moves.