US stocks fell after the jobs report

U.S. stocks fell on Friday and were preparing for weekly losses, with the latest employment report showing that the US labor market added strong but slow jobs in May.

In the afternoon trade, the S&P 500 fell 1.2%, while the Dow Jones Industrial Average fell 183 points, or 0.6%, and the Nasdaq Composite fell 2%. All three indices are definitely for losses of less than 1% per week.

Federal Reserve officials are actively monitoring The state of the labor market They decide how much and how quickly to raise interest rates in the coming months.

One thing that worries officials is that there will be a strong labor market Add to that the rising inflation Competitive wage for workers increases bargaining power. Central Bank Vice President Lyle Brainard said Thursday Supported plans to raise interest rates Half a percentage point at a meeting later this month and back in July.

American employers Added 390,000 jobs last month, The lowest growth rate since April last year, the unemployment rate was 3.6%. Wages rose 5.2% year-on-year from 5.5% in April.

Economists, conducted by The Wall Street Journal, expect to add 328,000 jobs last month. And they saw The unemployment rate is declining slightly It was 3.5%, the lowest level in 53 years before the outbreak of the Govt-19 epidemic in the United States in February 2020.

The monthly jobs report was the biggest factor in the decisions to change the Fed rate, but not for months Strong job opportunities Has diminished its importance. Traders and financial managers say that now everyone’s focus is on inflation data. Next Friday, the Department of Labor will release data on US inflation in May.

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For now, the stock seems to be in a bit of a holding pattern. After eight weeks of declines, the Dow Industrial Average rose 6.2% for the week ended May 27. This week, the blue-chip index is ready to finish the week with less than 1%. Approximately one month.

Michael Antonelli, Baird’s managing director and market strategist, said the stock has seen a bright spot this week. After Microsoft Reduced its sales and revenue guidance on ThursdayShares of the company ended higher today.

“It says,” Mr. Said Antonelli. “It means that the worst predictions have been priced.”

“This summer can be a grind,” he said.

In the midst of a record invasion in the United States, economists are watching for signs of a possible wave turn. Anna Hirtenstein of the WSJ looks at how interest rates on high inflation, market sales and recession risks are challenging the growth of America’s workforce. Photo: Olivier Douliery / AFP

In corporate news, stocks Tesla Then fell 8.2% Reuters reported That chief executive Elon Musk The company that makes electric cars is looking to cut staff. Mr. Musk told staff to return to the office earlier this week or Look for work elsewhere.

Markets have experienced high volatility in recent months as investors seek to assess the combination of variables that have blurred their outlook and added to fears of a recession.

However, over the past two weeks, some fatigue has subsided.

Justin Vix, managing director of stock trading at Stifel Nicolaus, said the past week has seen an increase in the number of buying orders among his customers.

The Wall Street Fear Scale, the Cboe Validity Index, trades back in the mid-20s, and the VVIX, a measure of how volatile the VIX is, is trading at its lowest level in two years. VVIX is based on the price of options in the volatile index.

“As the volatility worsens, it has brought some comfort to the idea that they can put the money back into work,” Mr. Vix said.

Tightening the central bank’s financial position could reduce inflation but weigh on growth and the housing market. Russia’s war against Ukraine And China’s zero-Govt policy has added to supply-chain disruptions and further inflation.

In bond markets, the benchmark 10-year U.S. Treasury yield on Thursday was 2.914% to 2.973%. Yields and prices move in the opposite direction.

The price of oil is also over $ 100 per barrel, which adds to the cost of energy and fuel. The future for Brent crude oil, The global oil standard, was up 0.4% at $ 118.08 a barrel. Oil and gas companies were a rare bright spot on Friday, with energy companies in the S&P 500 up 1.4%, recording single-sector gains.

“You have a very strong US economy now, but this high inflation has not abated,” said Frank Alland, Danske Bank’s global chief strategist. “Eventually it will bring consumers to a point where they can say we’re looking at our budget, and tighten it up a bit here and there. If everyone backs down a bit, you’re moving towards a recession.

Abroad, the Pan-Continental Stoxx Europe 600 flattened approximately. Markets in the UK, Hong Kong and China were closed for the holiday. Japan’s Nikkei 225 was up 1.3% and South Korea’s Kospi was up 0.4%.

Traders working on the floor of the New York Stock Exchange.


Photo:

Michael Nagle / Bloomberg News

Write to Caitlin Ostroff at [email protected] and Corrie Driebusch at [email protected]

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