us stocks were trading higher on friday but the sp 500 index remained on track for a weekly loss after a report from the labor department showed a slowdown in job creation robust wage growth and a low unemployment rate for the week the dow was on track to drop 13 the sp 500 was on pace to fall 04 and the nasdaq was heading for a 01 dip according to factset data at last check us stocks were up friday afternoon with the dow paring gains as investors weighed data showing the number of jobs created in june was the smallest increase in about two and a half years the department of labors employment report on friday showed the us economy created 209000 jobs in june below the 240000 forecast by economists polled by the wall street journal see jobs report shows 209000 gain in june smallest increase since end of 2020 the data were taken as a sign that the federal reserves interestrate hikes were finally starting to cool the labor market but other details of the report suggested that the fed would still face pressure to continue raising interest rates the equity market is in a tricky situation said seb vismara global macro economist and strategist at bny mellon investment management in a phone interview friday risks remain to the upside in terms of interest rates the us economy remains too strong for core inflation to quickly fall back to 2 putting pressure on the fed to keep hiking rates this year and potentially hold them there for longer than anticipated he said job growth has been cooling while openings recently fell but wage growth seen in fridays employment report points to households remaining in quite good shape according to vismara average hourly earnings grew at a pace that was higher than expected he said this remains an economy where incomes are growing strongly average hourly earnings increased 04 percent last month for a yearoveryear rise of 44 the report shows while the unemployment rate edged down to 36 in june from 37 in may the labor market data did little to dissuade us from the view that the employment dynamic in the us is still solid said rick rieder blackrocks chief investment officer of global fixed income and head of the firms global allocation investment team in emailed commentary friday the full labor market picture is clearly still running at a decent level and shows little sign of rolling over even as interest rates move higher and higher federalfunds futures on friday afternoon indicated a 924 chance of the fed hiking its benchmark rate by a quarter percentage point in july to a targeted range of 525 to 55 according to cme fedwatch tool at last check readfeds goolsbee says job data show labor market is cooling to sustainable pace the yield on the 2year treasury note has dropped back below 5 down six basis points at around 495 on friday afternoon according to factset data at last check the yield on the 10year treasury note was little changed at about 405 other analysts noted the us economys resilience this year job growth slowed in june but the yeartodate increase of 278000 jobs per month is very strong versus history in fact the last time the us created this many jobs per month over a sixmonth period prepandemic was 1999 said ronald temple chief market strategist at lazard in emailed commentary friday the feds tightening measures are working but with 165 open jobs per unemployed person wage growth of 04 per month and quit rates at 26 per month there is still work to do to put the inflation genie back in the bottle he said a hike in july remains my base case as does one additional hike thereafter us stocks have started the second half of 2023 with a pullback with all three major indexes heading for a weekly loss on friday afternoon still the sp 500 has risen more than 15 so far this year according to factset data at last check stock prices in the first half have already run ahead and discounted a norecession scenario said anthony saglimbene chief market strategist at ameriprise financial in a phone interview friday if we get that then stocks can move a little higher he said if we dont then i think stocks are in for more volatility in the second half this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal