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Wall Street trades with slight gains, driven by the banking sector and awaiting key US employment data

Wall Street trades with slight gains, driven by the banking sector and awaiting key US employment data
Wall Street trades with slight gains, driven by the banking sector and awaiting key US employment data

US bank stocks climb to more than one-month highs as market awaits official nonfarm payrolls report.

The Wall Street’s main indexes start July with slight increaseswhile the market awaits key data on US employment, which is showing some signs of cooling. The banking sector is driving stocks.

The Dow Jones industrial index and the S&P 500 rose 0.1%. The Nasdaq technology benchmark rose 0.3%. The world’s largest stock market closed the first half of the year with losses on Friday.

S&P 500 banking index rises 1.3% to its highest level in more than a monthwith JP Morgan Chase shares hitting an all-time high. In parallel, US Treasury bond yields hit their highest level in more than two weeks.

US activity and labor market cool down as inflation eases

The American Institute for Supply Management (ISM) indicated that day that US manufacturing industry contracted for third consecutive month in Junepressured by rising interest rates and falling demand for goods.

The Federal Reserve has kept its benchmark overnight rate at 5.25%-5.5% since July. Financial markets expect the US central bank to start its easing cycle in September, although monetary authorities have recently adopted a more hawkish outlook.

U.S. factory employment fell in June after a brief rebound in May. Factories are cutting staff numbers through layoffs, furloughs and hiring freezes.

The overall labour market is gradually cooling. The government is likely to report on Friday that jobs are improving, according to a Reuters poll of economists. non-farm payrolls jobs increased by 195,000 in June, after rising by 272,000 in May. Unemployment is expected to remain unchanged at 4%.

Against a backdrop of weak orders, factory inflation was much more subdued last month. The index of prices paid by manufacturers fell to its lowest figure since December.

The decline in goods prices largely explains why monthly inflation in May remained unchanged. The decline in input prices last month bodes well for the continuation of the disinflationary trend in the broader economy.

Source: Ambito

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