Financial Stocks Broadly Higher After Strong Jobs Data Fuel Rate Hike Hopes

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Financial stocks traded broadly higher Friday, after a stronger-than-expected May jobs report fueled hopes that the Federal Reserve will raise interest rates sooner rather than later. The SPDR Financial Select Sector ETF climbed 0.6% in premarket trade, after being unchanged just before the data was released at 8:30 a.m. Eastern. Among the shares of the ETF's most heavily-weighted components, Wells Fargo & Co. rose 1%, Bank of America rallied 1.3%, J.P. Morgan Chase tacked on 0.8%, Citigroup gained 1% and Goldman Sachs Group advanced 0.4%. Rising interest rates can help boost banks' bottom lines as it could increase net interest margins, which is the spread the banks make from funding longer-term loans with shorter-term borrowings. The yield on the 10-year Treasury note rose to a seven-month high of 2.4% after the jobs data. The XLF has lost 0.3% year to date through Thursday, while the S&P 500 has gained 1.8%.

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