Wall Street slips as strong jobs data fuels concerns over rising interest rates
Major Wall Street indexes fell on Friday after stronger-than-expected jobs data fueled expectations of another sharp interest rate hike by the US Federal Reserve later this month.
The Labor Department report showed nonfarm payrolls rose by 372,000 jobs in June, higher than the estimated gain of 268,000 jobs, according to a Reuters poll of economists.
The report also showed the jobless rate remained near pre-pandemic lows at 3.6% and average hourly earnings rose 0.3%, after gaining 0.4% in May. which indicates the strength of the labor market.
“It certainly reinforces the idea that there will be a 75 basis point increase over the next two weeks,” said Tom Plumb, portfolio manager of the Plumb Balanced Fund.
“We are still where bad news is good news and good news is bad news…that will be until there is some perception that the Fed has reached or is in the process of achieve its goal of moderating economic growth.” Atlanta Fed Chairman Raphael Bostic, until recently among the central bank’s most dovish policymakers, said Friday he “fully” backs another 75 basis point rate hike later. this month.
Fed Governor Christopher Waller and St. Louis Fed President James Bullard said Thursday they would support another 75 basis point rate hike, but expect a slower pace downgrade. afterwards.
After a brutal first half, U.S. equity markets started July on solid footing, with investors taking relief from falling commodity prices and the Fed hinting at a more muted rate hike program amid recession fears.
The S&P 500 and Nasdaq posted their fourth straight higher close on Thursday, while all three major indexes were on course to post weekly gains.
Rate-sensitive stocks of high-growth companies such as Microsoft Corp, Amazon.com Inc and Nvidia Corp fell nearly 1% as US Treasury yields jumped.
As of 9:48 a.m. ET, the Dow Jones Industrial Average was down 68.69 points, or 0.22%, at 31,315.86, the S&P 500 was down 18.45 points, or 0.47%, at 3,884.17, and the Nasdaq Composite was down 87.57 points, or 0.75. %, at 11,533.78.
Levi Strauss rose 2.1% after the company’s second-quarter results beat estimates, helped by strong demand for its denim jeans and jackets.
Twitter Inc fell 4.6% after a report said Elon Musk’s deal to buy the social media company was in “serious jeopardy”.
GameStop Corp fell 7.5% after the video game retailer announced it had terminated the employment of chief financial officer Michael Recupero.
Falling issues outnumbered advances by a 2.00-to-1 ratio on the NYSE and a 1.52-to-1 ratio on the Nasdaq.
The S&P index recorded a new 52-week high and 29 new lows, while the Nasdaq recorded eight new highs and 11 new lows.
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