Weak US labor market data cheered stock exchanges

On Wednesday, U.S. stocks rose slightly amid soft jobs data that reinforced expectations that the Fed would cut rates by the end of the year, Business Insider reports. All three major indices rose within 1.95%. The yield on the 10-year Treasury note fell two basis points to 4.308%.

The private sector created fewer jobs in May than expected ADP reported an increase of 152k instead of the projected 175k. Annual wage growth remained at 5%, indicating a cooling labor market. The decline in hiring activity is a good sign for a possible rate cut.

On Friday, investors are awaiting the non-farm payrolls report. The figure is expected to be 175,000 in May, although Bank of America forecasts 200,000 and a drop in unemployment to 3.8%.

Investors believe the Fed will leave interest rates unchanged at its next meeting, but are hoping for a cut by the end of the year. The probability of a cut of 50 basis points or more is estimated at 60%.