Wall Street Down As Rates Hopes Dim

The main US indices have closed slightly lower, after a better-than-expected US jobs report was seen as reducing the chances of a Federal Reserve interest rate cut.

The Dow Jones was down 0.2 per cent at 26,922, but analysts said the session should be taken with a grain of salt because of low trading volumes after the Independence Day holiday on Thursday. The S&P 500 lost 0.2 per cent to 2,990, while the Nasdaq slipped 0.1 per cent to at 8,161.

A government report said the US added 224,000 new jobs in June, far above expectation. The report caused a shift in futures markets as they anticipated a smaller or no Fed interest rate cut on July 31.

All three major indices rallied to records on Wednesday following a trove of mediocre economic data that bolstered anxiety about a slowing economy and seemingly lift the odds of a Fed interest rate cut.

Gorilla Trades strategist Ken Berman said Friday's US jobs data had weakened that argument, especially compared with poor German economic data.

But Karl Haeling of LBBW said investors still believe the US central bank will cut based on statements from Fed chairman Jerome Powell and other officials. Investors think the Fed would still do what it takes to keep the economy growing, he said. (AFP)