US stocks end week lower following slew of jobs data

BLOOMBERG

US stocks slumped after a spate of jobs reports tamped down speculation the Federal Reserve would leave interest rates unchanged later this month. The S&P 500 fell 1.2% over the shortened holiday week while the Nasdaq 100 slid 0.9%. Yield on the two-year Treasury drifted down to 4.94% as investors digested government jobs data that fell short of estimates but brought signs that wage inflation remained a threat to the Fed’s fight against price gains.
Overall, the data showed signs of cracks in the American labour market, a day after a private payrolls report suggested resilience that may warrant several more rate hikes. Traders are betting on at least one more increase this year though they have not fully priced in a second hike. Chicago Fed President Austan Goolsbee left the door open for more data to sway officials ahead the central bank’s next meeting.
Traders will be closely watching next week’s consumer price print. Bloomberg economists are expecting the headline number to fall 3.1% though they don’t see that stopping the Fed on July 26. Reports from the big banks including Citigroup Inc and JPMorgan Chase & Co may also set the tone for second quarter earnings. The payroll numbers were not yet weak enough to stop the central bank’s tightening, according to Seema Shah, chief global strategist at Principal Asset Management.
June’s 0.4% wage growth indicates businesses are still desperate to draw in and keep workers, according to Jeffrey Roach, chief economist at LPL Financial. Stocks have been losing ground after a strong first half of the year as hawkishness from central banks from the US to the UK dampens hopes of a soft landing for the global economy.
Technology shares have been one of the hottest trades, driven by the buzz around AI, but Bank of America Corp strategists said investors who piled into the sector risk being caught off-guard in the selloff sparked by rate hikes.
Gold advanced while crude futures traded higher after the Biden administration said its purchasing 6 million more barrels of oil for strategic reserves. The S&P 500 fell 0.3% in New York. The Nasdaq 100 fell 0.3%. The Dow Jones Industrial Average fell 0.6%. The MSCI World index was little changed.
The Bloomberg Dollar Spot Index fell 0.7%. The euro rose 0.7% to $1.0967. The British pound rose 0.7% to $1.2834. The Japanese yen rose 1.4% to 142.10 per dollar. Bitcoin fell 0.3% to $30,230.46. Ether fell 1.1% to $1,863.42.
The yield on 10-year Treasuries advanced three basis points to 4.06%. Germany’s 10-year yield advanced one basis point to 2.64%. Britain’s 10-year yield declined one basis point to 4.65%. West Texas Intermediate crude rose 2.6% to $73.66 a barrel.