“The data leading up to Friday’s big employment release are pointing to another healthy jobs report,” Roach said. “Unless Friday’s report is much weaker than expected, the Fed will not likely change its plans to increase rates during the next regularly scheduled meeting later this month.” Roach pointed to the ADP private payroll report, job opening and turnover data and manufacturing index readings as signs that Friday’s closely followed jobs report should be strong. And that could spell bad news for those hoping the Federal Reserve does not return to raising interest rates after pausing at the June meeting, he said.
- All three major indices sank roughly 2% on the heels of the report.
- Initial jobless claims increased to 248,000 last week, though the total was only 3,000 higher than the Dow Jones estimate, the Labor Department reported Thursday.
- Going further, the Fed said it expects to impose three quarter-point interest rate cuts next year.
- High rates work by slowing the overall economy and hurting prices for investments.
Some analysts warned the inflation data could mean not only a delay to rate cuts but also the possibility that the Fed would raise rates further. The Fed has already pulled its main interest rate to the highest level since 2001 in hopes of grinding down high inflation. High rates work by slowing the overall economy and hurting prices for investments.
Now, traders are largely betting on three or four cuts this year. Meta Platforms stock climbed roughly 2% in premarket trading on Thursday after the launch of Threads, its rival platform to Twitter. Initial jobless claims increased to 248,000 last week, though the total was only 3,000 higher than the Dow Jones estimate, the Labor Department reported Thursday. The number represented a rise of 12,000 from the previous week. Dallas Federal Reserve President Lorie Logan said Thursday she was one of the central bankers who thought it would have been “entirely appropriate” to raise interest rates again at the June meeting.
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“That will make the Fed more confident in cutting rates and amidst an other wise quiet day, that’s what’s driving this market,” Essaye said. Stocks were mixed on Monday as investors took a pause before the release of the January consumer price index on Tuesday. Markets have been lifted this year by strong company earnings, how to make money trading currency signs of a healthy economy, and hype about the earnings potential of artificial intelligence technology. But it’s still just one data point, which followed several months of encouraging trends where inflation eased, said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
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The stock market is trying to push higher, even in the face of gently rising Treasury yields. The indexes have notched impressive gains for the year, with the S&P 500 up more than 20%. Big Tech took the lead early in the year, as tech company earnings growth prospects have gotten even brighter on the back of opportunities related to artificial intelligence. Tuesday sees the release of consumer-price index data for February, while initial jobless claims and retail sales are due out Thursday. “The Fed talking rate cuts as the catalyst to keep the torrid market frothy is going to disappear going toward the end of the year,” Agati said. “The market seems to think the Fed has cracked the code,” Amanda Agati, chief investment officer at PNC Financial Services, told ABC News.
ET showed that the ISM Services index for June registered a 53.9 reading, up from 50.3 in May and better than the 51.3 estimate. The three major indexes were all down more than 1% in Thursday morning trading, showing the strength of the session’s selloff. Piper Sandler downgraded point-of-sale lender Affirm to underweight from neutral, citing rates continuing to move higher and the student loan repayments slated to begin again in October.
Fertilizer stocks CF Industries (CF) and Mosaic (MOS) and chemicals company Albemarle (ALB) were higher too. Wall Street’s mood has largely tracked the rapidly changing expectations regarding inflation and rate hikes. Just a month ago, before Fed chair Jerome Powell gave a speech that suggested more big rate increases were coming, the Fear & Greed Index was indicating levels of Greed, a sign of complacency. The Nasdaq Composite gave back earlier gains and turned negative in Monday afternoon trading, falling below the threshold needed to set its first record close since November 2021. As inflation nears normal levels and hiring remains robust, many economists expect the U.S. to achieve a soft landing. That type of outcome would help companies thrive and stock values climb, analysts said.
S&P 500 Futures Drop in Premarket Trading; ZoomInfo Technologies, Bruker Corp Lead
The yield on the 10-year Treasury was last trading at 4.031% after jumping more than 8 basis points. The 2-year Treasury yield was last up by more than 13 basis points to 5.082%. “In this environment, the FOMC needs to make policy more restrictive so we can return inflation to target in a sustainable and timely way,” Logan said in prepared remarks for a speech at Columbia University.
Dow closes more than 300 points lower as hot jobs data raises fears of Fed rate hikes: Live updates
The shares included in it are weighted according to price; the index level represents the average of the shares included in it. Once a crash begins, it tends to last a long time, and Goldman Sachs forecasts China’s current real estate market still has further to fall. The Russell 2000 rallied 1.9% on Monday, turning positive for the year for the first time in 2024. “If the Fed does pull this off, prices could move even higher from here,” said Cox, of eToro. Moody’s tumbled 7.6% after the credit-rating company reported weaker profit for the latest quarter than Wall Street had forecast.
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Threads went live on Wednesday, with Meta CEO Mark Zuckerberg and Meta seemingly seeking to sway Twitter users frustrated with Elon Musk’s changes to the platform to jump ship. Meta CEO Mark Zuckerberg said on his official Threads account on Thursday that 20 million users had signed up for the platform after launching. The stock has surged more than 52% year to date, but has traded flat over a 12-month period.
It is not a solicitation or a recommendation to trade derivatives contracts or securities and should not be construed or interpreted as financial advice. Any examples given are provided for illustrative purposes only and no representation is being made that any person will, or is likely to, achieve profits or losses similar to those examples. DailyFX Limited is not responsible for any trading decisions taken by persons not intended to view this material. The Dow plummeted nearly 900 points in late morning trading…and all 30 Dow components were in the red. Nine Dow stocks, including tech giants Intel (INTC), Microsoft (MSFT), Apple (AAPL) and Salesforce (CRM), were down more than 4% each. The tech sector was hit particularly hard Tuesday, as investors ratcheted up their bets for a historically large interest rate hike by the Federal Reserve next week.
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Archer Aviation marked one of the biggest laggards on the index, last down 12.5% and on track to snap a six-day win streak. Should the stock close near these levels, it would mark https://g-markets.net/ the worst daily performance since May 12. Thursday’s economic data releases foreshadow strength in Friday’s jobs report, said Jeffrey Roach, chief economist for LPL Financial.
“Sustained y/y visits growth suggests mobility continues to improve and SG [same-store sales growth] can maintain momentum, removing a key overhang on the stock,” the firm said in a Thursday note. The total was more than double the 220,000 Dow Jones estimate and was boosted by growth of 232,000 in the pivotal leisure and hospitality sector. Construction added 97,000 while trade, transportation and utilities grew by 90,000. Private payrolls exploded in June, with job growth totaling 497,000 on the month, according to a report from payrolls processing firm ADP.
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