US close: Stocks dip despite strong June non-farm payrolls

US stocks finished slightly lower on Friday following a stronger than expected uptick in hiring last month, which called into question the speed - if not the likelihood - of interest rate cuts by the Federal Reserve over what remained of 2019.

By the end of trading, the Dow Jones Industrial Average was down 0.16% at 26,922.12, while the S&P 500 was 0.18% lower at 2,990.41 and the Nasdaq Composite traded 0.10% weaker at 8,161.79.

The Dow dropped 142 points at the open as market focus was almost solely focused on Friday's strong non-farm payrolls report and unemployment data.

Hiring in the US picked up in June at a greater than expected rate of 224,000, leading some economists to question whether the US Federal Reserve will cut short-term official interest rates when it next meets on 30-31 July.

The figure came in well ahead of the rise of 158,000 forecast by economists, following a downwardly revised gain of 72,000 during May, and an average 183,000 increase over the previous three-month stretch.

In parallel, according to the Department of Labor, the US jobless rate ticked higher by a tenth of a percentage point from the month before to reach 3.7%, but mainly because the labour force participation rate also rose by a tenth of a point to 62.9%.

Following Friday's jobs data, the yield on the benchmark two-year US Treasury note raced higher by 10 basis points to 1.88%, versus a session high of 1.89% and 2.55% one year ago.

And the yield on 10-year US Treasuries was up by eight points to 2.03%.

Last month, the central bank opened itself up to the possibility of easing monetary policy, stating it would "act as appropriate" to maintain the current economic expansion.

While investors were betting heavily on rate cuts ahead of the session, the report tempered expectations for aggressive monetary policy, with expectations for a 50 basis-point rate cut in July falling to just 4.9%, according to the CME's Fed watch tool, from the 29% odds that were price-in just before the report, while expectations for a cut of 25 basis points, however, rose to 95.11% from 70.8%.

The chances of 75bp-worth of cuts in the target range for the Fed funds rate stood at 45.6%.

Elsewhere, geopolitical tensions in the Middle East were again in focus after British Royal Marines claimed a large Iranian oil tanker on Thursday after it was caught attempting to take oil to Syria, in violation of EU sanctions.

Oil prices were up in early trade, with West Texas Intermediate ahead 0.35% at $57.71 a barrel, while Brent Crude was trading 0.33% firmer at $64.44 per barrel.

On the corporate front, Samsung warned investors that its second-quarter earnings looked set to fell 56% year-on-year basis, citing weak demand for memory chips - putting pressure on US semiconductor stocks such as Qualcomm and Broadcom, with the shares of the former ending the session up by 0.04% but those of the latter down by 0.78%, respectively.

Dow Jones - Risers

Goldman Sachs Group Inc. (GS) $207.88 0.90%
Nike Inc. (NKE) $86.88 0.79%
Unitedhealth Group Inc. (UNH) $247.09 0.77%
JP Morgan Chase & Co. (JPM) $113.47 0.59%
Boeing Co. (BA) $355.86 0.39%
Verizon Communications Inc. (VZ) $58.31 0.31%
Cisco Systems Inc. (CSCO) $56.60 0.21%
Chevron Corp. (CVX) $123.54 0.15%
Coca-Cola Co. (KO) $52.11 0.02%
Walgreens Boots Alliance, Inc. (WBA) $55.19 0.00%