Soft Jobs Data Fuels Tech Rally, Broad Market Gains

Tech stocks climbed Friday, adding to Thursday's gains after the Labor Department said the economy added fewer jobs than expected in June. The report lowered the probability of a near-term rate hike, according to CME FedWatch. The 2-year Treasury yield fell 10 basis points to 4.68%.

Apple rose 2.3%. NVIDIA gained 3.1%. Microsoft added 1.8%. The moves reflected a repricing of rate expectations, with lower discount rates boosting high-valuation growth stocks.

The softer jobs data also lifted the broader market. The S&P 500 rose 0.8%, with the technology sector up 1.5%. The Nasdaq Composite gained 1.2%.

For traders, the readthrough is clear: lower rates reduce the cost of capital for tech companies with long-duration cash flows. That dynamic is most pronounced in semiconductors and software, where valuations are sensitive to discount rate changes. NVIDIA, as a proxy for AI infrastructure spending, benefits from both lower rates and sustained demand.

The sector's strength was not limited to mega-caps. Smaller tech names also rallied. The iShares Expanded Tech-Software ETF gained 1.9%.

The next catalyst for the market is the consumer price index report due Wednesday. The consensus estimate calls for a 0.2% monthly rise in core CPI. A soft inflation print would reinforce the case for rate cuts later this year. A hot number would revive the hawkish narrative.

The jobs report has reset expectations. The question now is whether inflation data will confirm the softening trend. The CPI report is due at 8:30 a.m. ET Wednesday.