Wall St eyes weak open as strong jobs data fuels rate hike worries

• Stronger jobs statistics contributed to rate hike by the U.S. Federal Reserve later this month.
• Traders’ bets on the Fed raising rates by 75 basis points increased to 97.7% from 91.5%.
• U.S. stock markets started well as investors found solace in Fed’s hints of a moderate rate hikes.

As of July 8, Reuters: Stronger-than-expected jobs statistics contributed to anticipation of another significant rate hike by the U.S. Federal Reserve later this month, causing Wall Street’s major indexes to open lower on Friday.

According to the Labor Department’s report, nonfarm payrolls increased by 372,000 jobs last month, a significant increase over the 268,000 jobs that economists polled by Reuters had predicted.

The survey also revealed that the unemployment rate, at 3.6 percent, remained close to pre-pandemic lows and that average hourly earnings increased by 0.3 percent, as anticipated, following gains of 0.4 percent in May.

Also Read

Wall Street set to open lower on recession fears

The S&P 500 saw its worst first-half percentage decline since 1970. The...

Tom Plumb, portfolio manager of the Plumb Balanced Fund, said, “Certainly, it strengthens the notion that there will be a 75-basis-point increase in the next two weeks.”

“Good news is still bad news and vice versa where we are. That will continue to be the case until there is some notion that the Fed’s goal of restraining economic expansion has been or is being achieved.”

According to the CME Group’s Fedwatch tool, traders’ bets on the Fed raising rates by 75 basis points increased to 97.7% from 91.5 percent before to the release of the data.

After a dismal first half of the year, U.S. stock markets started the month well as investors found solace in the Fed’s hints of a more moderate timetable of rate hikes.

On Thursday, the Nasdaq (.IXIC) and the S&P 500 (.SPX) posted their fourth straight higher closes.

Both St. Louis Fed President James Bullard and Fed Governor Christopher Waller stated on Thursday that they would support a subsequent 75-basis-point rate increase later this month, but at a slower pace.

At 09:01 a.m. ET, the Nasdaq 100 e-minis were down 118.75 points, or 0.98 percent, while the S&P 500 e-minis were down 19 points, or 0.49 percent.

After the company’s second-quarter results above expectations, helped by robust demand for its denim pants and jackets, Levi Strauss (LEVI.N) increased 4.1 percent in premarket activity.

Twitter Inc (TWTR.N) dropped 4.1 percent as a result of a story claiming that Elon Musk’s acquisition of the social media giant is “seriously jeopardised.”

After announcing that company had fired Chief Financial Officer Michael Recupero, GameStop Corp (GME.N) saw a 5.3 percent decline.

Also Read

Asian shares wary as Wall Street prospects slip

Asian shares are cautious as Wall St futures slip. Soft U.S. data...