U.S. stocks were relatively unchanged early Thursday as traders braced for June’s crucial jobs report. Economists expect the economy added 110,000 jobs last month, a significant drop from the previously reported 139,000. They also anticipate the unemployment rate may inch higher to 4.3%, up from 4.2% in May.
“If June’s jobs report disappoints, the market could rotate away from more speculative technology stocks into value names,” said Jay Hatfield, founder and CEO of Infrastructure Capital Advisors. “Thursday could be a little dicey. The tradeoff between tech stocks being down and value going up — a lot of times the overall market will go down because tech stocks are 40% of the market.”
Hatfield noted that a disappointing report could lead the Federal Reserve to consider cutting rates earlier than expected, possibly as early as July.
Thursday’s report follows data from ADP released a day earlier, which showed that private payrolls saw minimal increases last month. Investors are also closely monitoring the progress of President Trump’s tax and spending megabill, which advanced in the House of Representatives following a dramatic night of voting that nearly stalled due to Republican holdouts. The House voted 219-213 to move the bill forward, marking a significant win for Republican leadership.
Thursday will be a shortened trading session, with the New York Stock Exchange and the Nasdaq closing at 1 p.m. ET.
Stable stocks await pivotal jobs report
U.S. markets are closed on Friday for Independence Day.
Meanwhile, short interest in the S&P 500 and Nasdaq-100 has been steadily rising, according to S3 Partners, a Wall Street firm that specializes in tracking short interest. “Short interest has been rising alongside the rally, suggesting a reversal strategy — investors selling into strength, possibly as a hedge or due to skepticism about the recovery,” S3 noted. The S&P 500’s short interest as a percentage of total float has climbed above 5.8% from about 5.4% at the beginning of the year, while Nasdaq-100 short interest has increased to about 6.1% from less than 5.2%.
Shares of Tripadvisor surged after reports emerged that activist investor Starboard Value has taken a stake of more than 9% in the company. Tripadvisor shares were up more than 8% in extended trading. Datadog also saw a significant rise, climbing 9% in after-hours trading after the stock was added to the S&P 500 index.
Datadog will replace Juniper Networks, which was recently acquired. Stock futures remained little changed shortly after 6 p.m. ET Wednesday night. Dow Jones Industrial Average futures added 14 points, or less than 0.1%.
S&P 500 and Nasdaq-100 futures also climbed fractionally.
