(Updates with index/price moves, macroeconomic data, and company/geopolitical news from the first paragraph.)
US equity indexes traded mixed as the economy added the fewest jobs since February, triggering a rotation out of high-growth sectors and into defensives.
The Nasdaq Composite dropped 1.4% to 25,681.1, and the S&P 500 declined 0.6% to 7,441.9 after midday Thursday. The Dow Jones Industrial Average bucked the trend, remaining 0.6% higher at 52,752.5 after hitting a new all-time peak earlier in the session.
Communication services, technology, and consumer discretionary were the steepest decliners. Healthcare, consumer staples, and utilities led the gainers.
The June employment report showed nonfarm payrolls rose by 57,000, according to the Bureau of Labor Statistics, below the 113,000 jump expected in a Bloomberg-compiled survey. May payrolls were revised downward to a 129,000 gain, and April payrolls were revised down to a 148,000 expansion, for a net downward revision of 74,000 jobs.
Hourly earnings increased by 0.35%, compared with the 0.3% gain expected, and following a 0.27% gain in May. Hourly earnings were up 3.5% year-over-year.
Meanwhile, Atlanta Federal Reserve's gross domestic product 'Nowcast' estimate came in at 1.2% growth in Q2, versus the previous 2.5% forecast.
The probability of the Federal Reserve staying on a policy hold in September jumped to 46% on Thursday afternoon from 36% a day ago, according to the CME FedWatch tool. The likelihood that the Fed pause will extend into October and December also increased.
Most US Treasury yields fell, with the two-year down 3.5 basis points to 4.13%.
"The US job market stumbled in June and wasn't quite as solid as previously believed over the prior two months," Derek Holt, head of capital markets economics at Scotiabank, said in a note. "The result drove down shorter-term US Treasury yields and reduced OIS contract pricing for hikes, with the September contract now down 10bps from the full hike pricing back on September 22nd."
Gold futures advanced 1.2%% to $4,129.7, and silver futures jumped 1.4% to $61.37.
In geopolitical news, the Doha discussions between the US and Iran produced "positive progress" on issues related to the memorandum that halted the war in June and were "building on the outcomes" from the Switzerland summit, a Qatar Foreign Ministry spokesperson said in a post on X, formerly Twitter, according to Reuters.
Negotiators spent two days discussing maritime traffic in the Strait of Hormuz and unfreezing Iran's funds, two critical issues under the initial deal, sources familiar with the discussions told Reuters. Iran issued a fresh warning for vessels to follow Tehran-designated routes through the Strait of Hormuz, CNN reported Thursday.
The front-month global benchmark North Sea Brent declined 0.6% to $71.17 per barrel, and the US West Texas Intermediate fell 0.6% to $68.16 per barrel.
In company news, Tesla's (TSLA) shares slumped 7.8% even as the company's Q2 deliveries beat market expectations, while Truist Securities said the electric vehicle maker failed to provide any updates on key topics.
Apple (AAPL) plans to launch five new iPhone models to gain market share despite a memory shortage that is driving up prices, Nikkei Asia reported Thursday, citing sources familiar with the matter. Shares jumped 4.7%, the Dow's top gainer.