Nasdaq and S&P 500 Soar to Record Highs Amid Labor Market Weakness

The Nasdaq and S&P 500 indices reached new peaks as megacap stocks surged, driven by weak U.S. labor market data which lowered Treasury yields. Major tech stocks posted gains between 1-4%. Investors anticipate potential interest rate cuts by the Federal Reserve, bolstered by recent economic indicators pointing to a slowing economy.

The tech-heavy Nasdaq and the benchmark S&P 500 surged to record highs on Friday, as most megacap stocks achieved all-time highs after latest data indicated U.S. labor market weakness and subsequently pulled Treasury yields lower.

Microsoft, Meta Platforms, Amazon.com and Apple advanced between 1% to 4%, hitting record highs. This propelled the information technology sector to an all-time high and crowned the S&P 500 communication services as the top sector performer, rising 2.1% to its highest since 2000.

Labor Department data showed U.S. job growth slowed in June, with the unemployment rate climbing to a 2.5-year high and wage gains slipping. This supported the narrative of an easing labor market, giving a fresh boost to bets on a September interest rate cut.