Today, we’re going to talk about the market's response to a surprising job growth report…

A livestream that led to a familiar meme stock tanking nearly 40%...

And two crucial market events you should have circled on your calendar if you plan on trading next week.

Here’s the heatmap for today.

Wall Street had quite the Friday, as the market reacted to a surprisingly strong jobs report. The S&P 500 dipped by 0.1%, the Dow Jones slipped 0.2%, and the Nasdaq took a small 0.2% tumble. It was a bit of a stumble for all three major indexes.

Despite Friday's dip, the week ended on a positive note, with all three indexes logging gains. Investors had been hopeful that more economic data would show a slowdown, which could lead to interest rate cuts. But the Labor Department had other news, reporting a much stronger-than-expected job growth.

In May, the US added 272,000 jobs, significantly higher than predictions. However, the unemployment rate also inched up to 4.0%. It’s a mixed bag, showing both strength in job creation and a slight rise in unemployment.

Homebuilder stocks took a hit after the jobs report, which dampened hopes for a rate cut in September. The SPDR S&P Homebuilders ETF (XHB) sank by 1%, while DR Horton, Inc. (DHI), the largest US homebuilder, slipped by 2%. Lennar (LEN) and Toll Brothers (TOL) were down by more than 1% in afternoon trading. The jobs report underscored the challenge the Federal Reserve faces in deciding when to lower interest rates. The strong economy and labor market, coupled with persistent inflation, support the case for maintaining higher rates longer.

Following Friday’s jobs report, the likelihood of a Fed rate cut in September dropped to 53% from about 69% the previous day, according to the CME FedWatch Tool. Although the Fed doesn’t directly set mortgage rates, lenders' rates often follow its lead, keeping mortgage rates elevated around 7% and homebuying activity low.

Meanwhile, in the meme stock universe, Keith Gill, known as "Roaring Kitty," made his return to YouTube. He expressed confidence in GameStop’s leadership, but despite his support, the stock fell nearly 40%. Over in tech land, Nvidia’s 10-for-1 stock split has investors talking, though the company’s shares have faced some volatility with increased short selling.

Looking ahead, all eyes are on next week’s Fed policy meeting. Investors are eager to see if the Fed will drop any hints about future rate cuts in the "dot plot." Until then, the financial world will be watching closely as the story continues to unfold.

Stocks.News Spikers of the Day

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2 Key Market Events Taking Place Next Week

U.S. CPI Report: Wednesday, June 12

Get ready, because the May CPI report is due on Wednesday, June 12, at 8:30 AM ET, and it's expected to have significant implications.

It's anticipated that the report will reveal inflation rates continuing to surpass the Fed's target range of 2%. Annual headline CPI is projected to range between 3.1% to 3.5%, a step up from April's 3.4%.

Despite a slight cooling from its peak in the summer of 2022, when it reached 9.1%, inflation remains a concern. Even with 11 interest rate hikes implemented to curb it, inflation persists at nearly double the central bank’s target.

Now, let's discuss the core CPI figure, excluding food and energy prices. Estimates place it between 3.3% to 3.7%. This figure is closely monitored by Fed officials for insights into future inflation trends.

These latest CPI numbers are expected to underscore the challenges the Fed faces in bringing inflation back to its 2% target. Borrowing costs are climbing to levels not seen since the days of dial-up internet.

Investors should brace themselves as the annual CPI is likely to remain above the 3%-handle for the 11th consecutive month. This ongoing struggle against inflation poses a significant challenge for the U.S. central bank and could impact market sentiment and trading activity.

Powell’s Fed Meeting Expectations: Wednesday, June 12

Get ready, because on Wednesday, June 12, at 2:00 PM ET, the Federal Reserve will reveal its latest policy decision, right after the May CPI report. It's expected that interest rates will remain unchanged, holding steady between 5.25% and 5.50%.

During this meeting, FOMC policymakers will also share their predictions for interest rates and economic growth through 2024 and 2025, known as the "dot plot". It's like peering into a crystal ball, trying to decipher the Fed's future moves.

In March, the "dot plot" hinted at three rate cuts by year-end, but let's see if the Fed's stance has shifted since then.

Following the meeting, Fed Chair Jerome Powell will host a press conference, where investors will eagerly await his insights on the economy and inflation.

Last time Powell spoke, he cautioned that inflation isn't cooling off as fast as expected, but he didn't hint at more rate hikes just yet.

While it's likely that rates will remain steady, the policy statement will probably remind us that rate cuts are still a distant possibility, urging patience as the Fed navigates economic waters.

Investors once expected multiple rate cuts this year, but stubbornly high inflation and a resilient economy have shifted that possibility further away.

So, brace yourselves, as there's a growing risk that the Fed might hold off on rate cuts altogether this year. With inflation staying persistent and the economy holding steady, the Fed's options are limited.

For now, it's all about staying patient and keeping an eye out for opportunities because the Fed's next move is still uncertain.

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