Wall Street’s main indexes closed off the day’s lows after a numb start to the session on fears of a more resilient-than-expected U.S. labor market, as data released today dashed investors’ hopes that the Fed would adopt a more dovish approach. soft approach to policy tightening.
In particular, the industrial index Dow Jones erased intra-session losses to close in the +0.23% at 32,803.47 units while the expanded market index S&P 500 retreated against 0.16% at 4,145.19 units.
The greatest pressures were exerted on the technologically weighted Nasdaq, which was the best performer in the past few days and marked the latest counterattack since the Fed appeared to be taking a more dovish tone. The Nasdaq ended up losing as much as 1% to limit losses to 0.5% at 12,657.55 units.
In weekThe Dow write down marginal losses of the order of 0.1%, while the S&P 500 and Nasdaq they recorded her third consecutive week of gainswith a rise of 0.4% and 2.2% respectively.
In the news of the day, the US labor market broke every counteras shown by the data announced shortly before the start of trading, he 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 increase, have now completely reversed, with the market pricing in a 75 basis point increase at 69.5% and only 30.5% 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 reports, were again targeted by sellers today.
In particular, the index-heavy Apple, Microsoft, Amazon, Alphabet and Meta all moved down – although they pared losses in the end – with a drop of 0.2% to 2%.
On the contrary, support for the market was provided by JPMorgan’s stock which strengthened by 2.98%, Chevron which rose by 1.65% and Dow Inc by about 1%.