Nonfarm Payrolls Report Comes in Weak and Holds S&P 500 Back
The data from the nonfarm payrolls report showed lower than expected gains, keeping the S&P 500 subdued on Thursday.
Quick overview
- Stock indices experienced a slight uptick on Thursday, with the S&P 500, Dow Jones, and Nasdaq all gaining modestly despite disappointing nonfarm payrolls data.
- The U.S. nonfarm payrolls increased by 57K in June, falling short of the expected 110K, while unemployment decreased slightly to 4.2%.
- Chip stocks faced declines this week, impacting overall market performance, although some AI-related stocks and food manufacturers saw gains.
- The U.S. Treasury's 2-year note yield dropped as the Fed decided to hold off on interest rate cuts, contributing to a slight decrease in the U.S. dollar index.
Stock indices ticked up on Thursday morning weakly as the U.S. nonfarm payrolls reports showed an increase of 57K for June, which is lower than the 110K expected.
Nonfarm Payrolls (NFP) for the United States increased at a lower rate than anticipated and kept stock futures subdued this week. The S&P 500 added just 0.3% on Thursday, while the Dow Jones gained 0.3% as well, and the Nasdaq climbed by 0.5%.
Unemployment moved slightly lower, according to the report, dropping from 4.3% to 4.2%. Wage inflation moved up slightly- from 3.4% to 3.5%, just as analysts predicted. With inflation slightly higher and unemployment dropping, the market is being pulled slightly in two different directions.
Stock Futures Remain Suppressed
This could have been a bullish week for the stock market, but the early upswing experienced by chip stocks has fallen off as the market stabilized. Micron Technology (MU) jumped early in the week, moving from $1,060 to $1,160, but the stock fell by 11% on Thursday morning. This and other chip stocks have trended down throughout the week, despite a few sharp upswings.
Sandisk (SNDK) performed similarly this week, climbing sharply and then dropping even further. Now, many AI-related stocks are lower Thursday than they were at the start of the week. However, that is not true of Nvidia (NVDA) and Advanced Micro Devices (AMD), which are both slightly higher on the last day of trading for the week. Thursday marks the end of the stock market session for this week as U.S. stock trading closes off for Friday and the long Independence Day weekend.
Declines across the chip sector have spread to other parts of the stock market, suppressing gains that otherwise might have happened. What may take place now is a shift away from these stocks as investors worry about the performance of chip stocks for the second half of 2026. Bull markets tend to rotate in order to keep up momentum, and that could be what is happening here.
The wins on Thursday morning were spread across a few AI-related stocks as well as restaurants and food manufacturers. Meta Platforms, Coinbase, General Mills, and Robinhood all rose sharply on the S&P 500 on Thursday. While some of the market’s most reliable performers in 2026 fell dramatically this week, their decline allowed other stocks to take the spotlight.
The U.S. Treasury’s 2-year note yield dropped this week. News that the Fed is going to wait on interest rate cuts for now pushed the note yield lower. The U.S. dollar index slipped slightly as well on the nonfarm payrolls, dropping 0.62%. Cryptocurrency tokens made a recovery on Thursday, improving greatly from where they were the previous day and keeping up that upward momentum.
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