Stock market today: US futures tumbles after yet another strong US jobs report
Oct 6, 2023, 2:24 AM | Updated: 6:14 am
Wall Street quickly reversed course Friday after the government reported twice as many job gains as expected,
Futures for the Dow fell 1.1% and futures for the S&P 500 tumbled 0.9% before the bell.
The Labor Department reported Friday that U.S. employers added 336,000 jobs in September more than double the 163,000 analysts were expecting. August and July job gains were revised upward by a combined 119,000. The economy has now added a healthy average of 266,000 jobs a month in the past three months. The unemployment rate remained unchanged at a healthy 3.8%.
Combined with strong reports on job openings and unemployment benefits applications this week, all signs point to a labor market that has largely been unaffected by the Federal Reserve’s aggressive interest rate hiking campaign.
Job openings tend to rise in an environment where workers can quit their current jobs because there are better offers out there.
That suggests companies are paying more to lure workers, which is great for people looking for a better job, but also points to an economy at risk of another uptick in inflation.
The rapid selloff before the bell indicates that markets are expecting another rate hike from the Fed before the end of the year.
In a bid to combat inflation, the central bank has raised interest rates 11 times since March of 2022. Those hikes are supposed to cool the economy and loosen the job market, but have brought mixed results.
Market attention also remains on oil prices, which have fluctuated recently and will have major effects on how central banks act on interest rates.
A recent pullback in the price of oil has offered some relief on the inflation front for both U.S. households and the Federal Reserve.
Stocks have struggled since the summer under the weight of soaring Treasury yields in the bond market, which undercut stock prices and crimp corporate profits. Yields have leaped as traders acquiesce to a new normal where the Federal Reserve is likely to keep its main interest rate at a high level for a long time, as it tries to extinguish high inflation.
The yield on the 2-year Treasury ticked back up to 5.02%, while the return on the 10-year rose to 4.75%.
In equities trading, shale producer Pioneer Natural Resources jumped more than 10% on reports that it was in talks to be acquired by Exxon Mobil.
In Europe at midday, France’s CAC 40 and Germany’s DAX each gained 0.2%. Britain’s FTSE 100 retreated 0.8%.
Tokyo was the only major market to decline, while markets in China were closed for a holiday. They will reopen on Monday.
In Asian trading, Japan’s benchmark Nikkei 225 fell 0.3% to finish at 30,994.67. Australia’s S&P/ASX 200 rose 0.4% to 6,954.20. South Korea’s Kospi edged up 0.2% to 2,408.73. Hong Kong’s Hang Seng jumped 1.6% to 17,485.98.
Shares in Hong Kong jumped on strong buying of property and technology stocks that have seen sharp losses in recent trading sessions. However, troubled property developer China Evergrande’s shares were down 1.6%.
U.S. benchmark crude gained 18 cents to $82.49 a barrel. On Thursday, it fell $1.91 to settle at $82.31, a day after tumbling more than $5 for its worst drop in more than a year.
After surging from $70 in the summer to more than $93 last week, the price of a barrel of benchmark U.S. crude has slumped sharply. Brent crude, the international standard, gained 9 cents to $84.16 per barrel.
In currency trading, the U.S. dollar rose to 149.06 Japanese yen from 148.49 yen. The euro cost $1.0561, up from $1.0553.
On Thursday, the S&P 500, Dow Jones Industrial Average and Nasdaq composite all lost around 0.1%.