Stocks - Wall Street Rallies on Hopes for Lower Rates, Easing Trade Tensions

Investing.com - Stocks soared to their highest levels in the last four weeks, in part because of perceived bad news about the economy that could lead to lower interest rates and hopes that Mexico and the United States can strike a deal over border security.

The result was that the S&P 500 closed up 1%, the Nasdaq Composite jumped 1.66%, and the Dow Jones Industrial Average rose 1%, led by Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and Intel (NASDAQ:INTC).

Microsoft, up 2.%, finished with a market capitalization of about $1 trillion, tops among U.S. stocks. Today's was Microsoft's second close with a $1-trillion market cap this year.

The rally was fueled by bad news. May nonfarm payrolls grew by only 75,000 while the national unemployment rate held at 3.6%, same as in April. Growth in payrolls has slowed slowly but surely since last summer, with economists suggesting the cause is the fading effects of the Trump tax bills.

The weak report increased speculation the Federal Reserve will cut interest rates to help the economy. Investing.com's Fed Rate Monitor Tool suggests an 80% chance of lower rates by September. The Fed's key rate is 2.25% to 2.5%.

There was good news, too, in the possibility of some sort of deal so the Trump administration won't impose new tariffs on goods shipped to the US from Mexico.

Oil prices also moved higher by more than 2% in part because Saudi Arabia was pushing for production cuts among OPEC members and their allies for the rest of the year. Crude oil WTI futures finished up 2.66% to $53.99 barrel. Brent, the global benchmark, was up 2.63% to $63.29 a barrel.

The rally was big and especially broad among tech stocks. Microsoft, Apple, Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Google parent Alphabet (NASDAQ:GOOGL) were responsible for about half of the 1.9% gain in the Nasdaq 100.

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