The resilience beyond expectations shown by the US labor market appears to be causing … trepidation on Wall Street as hopes that the Fed will take a more dovish approach to policy tightening fade, with indices all trading lower in the latest session of the week.
In particular, the industrial index Dow Jones moves at a loss 0.4% or 120 units at 32,600 units and the expanded market index S&P 500 recedes against 0.5% at 4,125 units.
The greatest pressures are exerted on the technologically weighted Nasdaqwhich had been the best performer in recent days and marked the latest counterattack since the Fed appeared to be easing, which has been taking losses 1% moving on 12,593 units.
In the news of the day, the US labor market broke all counters, as data released shortly before the start of trading showed that it added more 528,000 seats of work in July, when analysts’ estimates spoke of barely 250,000 seats.
At the same time, the Ministry of Labor revised upwards the figures for June on 398,000 seats instead 372,000 had initially announced, while the unemployment rate analysts had expected to remain unchanged fell to a five-decade low in 3.5% from 3.6%.
The impressively strong picture displayed by the labor market seems to overturn the intentions of the Federal Reserve, which through the mouth of the head of the Federal Reserve, Jerome Powell, had indicated after its last meeting in July that it was oriented towards a softer approach to its next rate hikes. in order not to cause a recession in the economy.
However, with the labor market showing such momentum, bank officials are expected to be forced to continue aggressive moves to control galloping inflation.
Significantly, bets on the bank’s next rate hike in September, which were yesterday 65 to 35 on the possibility of a 50 basis point hike, have now completely reversed, with the market pricing in a 75 basis point increase at 68.5% and only 31.5% of the 50 m.v.
“Anyone who got on the train that the Fed is going to shift next year and start cutting interest rates should get off at the next station, because that’s no longer the case,” said Art Hogan, chief market strategist at B. Riley. Financial.
“This is clearly a situation where the economy is not screaming or headed for a recession here and now,” he adds.
The picture on the dashboard clearly paints the picture, as the tech giants that staged a mini-rally over the past ten days, following largely better-than-estimated earnings announcements, have found themselves once again in the sellers’ sights today.
In particular, the index-heavy Apple, Microsoft, Amazon, Alphabet and Meta are all moving down with losses of 0.5% to 2%.
On the contrary, support for the market is provided by JPMorgan’s stock which is strengthened by 2.5%, Chevron which is up 2% and Dow Inc with 1.3%.