[New York Close] Rise Amid Strong Labor Market... Dow Up 2.12%

The major indices of the U.S. New York stock market closed higher on the 2nd (local time) as the U.S. May employment data significantly exceeded Wall Street expectations.

Trading floor of the New York Stock Exchange (NYSE). [Image source=Yonhap News]

On that day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,762.76, up 701.19 points (2.12%) from the previous session. The S&P 500, which focuses on large-cap stocks, rose 61.35 points (1.45%) to 4,282.37, and the tech-heavy Nasdaq index closed at 13,240.77, up 139.78 points (1.07%).

All 11 sectors within the S&P 500 also rose. Materials stocks increased by 3.37%, while industrials (2.96%), energy (2.96%), consumer discretionary (2.2%), financials (2.18%), and real estate (2.02%) all rose more than 2%.

The rise in the New York stock market on this day was attributed to the strong U.S. labor market in May. The U.S. Department of Labor reported in its May employment situation report that nonfarm payrolls increased by 339,000 last month, significantly surpassing the expert forecast of 190,000 compiled by The Wall Street Journal.

The passage of the debt ceiling bill by the U.S. Senate the previous day, eliminating uncertainty, also appeared to contribute to the rise in the New York stock market. The market had been closely watching the possibility that U.S. politicians might fail to raise the debt ceiling.

Additionally, since the May unemployment rate rose compared to the previous month and hourly wages also increased, meeting market expectations, many investors anticipate that the Federal Reserve (Fed) will pause interest rate hikes in June. The U.S. May unemployment rate was recorded at 3.7%, higher than the previous month’s 3.4% and above the market expectation of 3.5%. Hourly wages rose by 0.3% compared to the previous month.

New York market experts also judged that despite the strong employment data, the Fed is still likely to take a pause at the next meeting. JP Morgan traders told CNBC, "The market is pricing in a Fed pause in June, and further labor market easing and slowing wage inflation will reassure the Fed to hold rates in July." They added, "We see a 50-50 chance between a pause and a hike in June," and predicted, "The two CPI and employment reports before July 26 will play a decisive role in the Fed’s planning after June."

Meanwhile, in the New York foreign exchange market, the value of the U.S. dollar also rose. The dollar index, which measures the value of the U.S. dollar against six major currencies, rose 0.44% from the previous day to 104.02.