The Nasdaq composite and Nasdaq-100 rallied Friday after a surprise July jobs miss cut the odds of a Federal Reserve rate hike. Cloudflare was a big earnings winner, while the Dow, S&P 500 and Russell 2000 also advanced.
The Nasdaq composite climbed 1.1% Friday, while the Nasdaq-100 added 1.2%, as technology stocks led gains after a surprise jobs report cut the odds of a Federal Reserve rate hike. Cloudflare was a big earnings winner, and Airbnb and Microchip also jumped after posting strong quarterly results.
Jobs miss reshapes Fed rate-hike odds
The report shifted the outlook for a Federal Reserve rate hike. Early Friday, the Labor Department said the U.S. economy unexpectedly lost 23,000 jobs in July, with the unemployment rate falling to 4.1%. Economists had expected the economy to add 88,000 jobs in July, with the unemployment rate holding at 4.2% — up slightly from June's addition of 57,000 jobs.
As a result, the odds for a rate hike at the Fed's September meeting fell to 42%, down from 67% a week earlier. The 10-year Treasury yield hit a low near 4.6% before paring its loss to 4.65%, down 2 basis points.
Cloudflare leads Nasdaq-100 earnings winners
Cloudflare stock soared nearly 16% after the company reported second-quarter results that beat Wall Street targets and issued a revenue outlook above expectations. The company posted earnings of 29 cents a share, up 38% from a year earlier, on revenue that climbed 36% to $696 million — topping analyst estimates of 27 cents a share and $664.7 million in revenue.
Airbnb and Microchip Technology also soared 15% and 13%, respectively, on strong earnings reports, lifting the Nasdaq-100. SpaceX added about 12% following Thursday's share-lockup expiration.
Dow, S&P 500 and Russell 2000 also gain
The Dow Jones Industrial Average edged up 0.2%. Small caps ran higher, and the Russell 2000 gained 1%. The S&P 500 added 0.5%, lifted by Coherent, Palantir and Newmont. Those three stocks each rose at least 7%. Winners beat losers on the Nasdaq and New York Stock Exchange by about two-to-one.
Source: Investor's Business Daily
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