Hopes of Mortgage Interest Rate cuts good for Buyers and Sellers

Hopes of Mortgage Interest Rate cuts good for Buyers and Sellers

The Dow finished higher Friday as prospects for an interest rate hike strengthened after a weaker-than-expected jobs report.

U.S. employers added just 75,000 jobs in May, well below the 178,000 gain that economists surveyed by Bloomberg expected. Another concern: Hiring gains for March and April combined were revised down by 75,000, according to the Labor Department Friday.

While this often would spook markets, investors took it as another incentive for the Federal Reserve to cut a benchmark rate in the coming months, making borrowing cheaper for businesses and consumers.

“The miss … and the subsequent revisions lower put July squarely in play for a rate cut,” said Cliff Hodge, director of investments for Cornerstone Wealth, in an email. “The stock markets are banking on the Fed’s ability to step in and save the day, as it has for much of the last decade.”

The Dow Jones Industrial Average leaped 263 points, or 1.02%, to finish at 25,984 on Friday. The broader Standard & Poor’s 500 added almost 30 points, or 1.05%, to close at 2,873. The tech-heavy Nasdaq rose nearly 127 points, or 1.66%, to end trading at 7,742.

boosted earlier this week after Federal Reserve Chairman Jay Powell had signaled the possibility of cutting rates.

The lackluster jobs report could be a sign that businesses are becoming more cautious as economic growth slows and the U.S. engages in multiple trade conflicts.