U.S. June Payrolls Rise 57,000, Markets Dial Back Near-Term Fed Hike Bets

U.S. hiring lost momentum in June, pushing traders to reassess the Federal Reserve's policy outlook in the months ahead. After the release, expectations for an early rate increase eased, U.S. stock index futures advanced, Treasury yields fell, and bitcoin stayed above $61,000. The U.S. government's nonfarm payrolls report released Thursday showed employment rose by 57,000 in June, well below economists' forecast of 110,000 and far under the revised 129,000 for May. May's initial reading was 172,000 before being revised down. The unemployment rate came in at 4.2%, slightly better than the 4.3% consensus estimate and below May's 4.3%. The figures point to slower job growth without a corresponding rise in unemployment. Key figures: - June nonfarm payrolls: +57,000 - Market forecast: +110,000 - Unemployment rate: 4.2% Rate-hike pricing shifted quickly after the data. With markets already weighing the impact of rising inflation and higher energy prices, the Fed's hawkish signal at its policy meeting two weeks ago had lifted expectations for a hike this summer or early fall. Following Thursday's report, that view softened. CME FedWatch data showed the probability of at least one rate hike before September slipping from about 65% to 50% within minutes. Risk assets reacted immediately. Bitcoin, which had already gained about 4% over the prior 24 hours, held above $61,000 after the announcement. U.S. equity futures climbed as well, with Nasdaq 100 futures up 0.7% after trading near flat ahead of the release. The 10-year Treasury yield fell 4 basis points to 4.46%, reflecting reduced expectations for further tightening. The weaker employment print temporarily cooled near-term rate-hike bets and supported risk sentiment. Inflation's recent pickup and energy prices remain key variables for markets to monitor.