S&P 500 – strong jobs report, falling stocks. Here Is why

On Friday, the US jobs report came in strong. The economy added 172,000 jobs in May, almost double what was expected. Normally, that's good news. Yet stocks fell right after the release. This is what traders mean by "good news is bad news."

The reason is the Fed. Inflation is already high, and a strong job market gives the Fed a reason to keep interest rates high — or even raise them. After the report, bond yields jumped to multi-year highs. Higher yields hurt stocks in two ways. They make safe bonds more attractive than risky shares, and they raise borrowing costs for companies. Expensive tech names feel it the most, and those are the stocks that led this rally.

Now attention turns to the Fed meeting on 16-17 June, the first run by new chair Kevin Warsh. US inflation data is also due this week. After Friday's strong report, that pressure is already showing, with the index sliding from its early-June record highs.

S&P500 key levels:

• Resistance 7,500-7550-7600.
• Support 7,350, then 7,300-7250.

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