US stocks close in the red despite strong labor market and stronger economic growth

• US stocks fell sharply in the Wall Street market.
• The Dow Jones Industrial Average closed down 1.1% at 33,027.49, while the broader S&P 500 Index declined 1.5%.
• The technology-heavy Nasdaq Composite Index fell 2.2% to 10,476.12.
• Edward Moya of the OANDA trading platform referred to the decline as a “Grinch selloff”.
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US Stocks on Wall Street fell sharply on Thursday, closing in a sea of red despite statistics indicating a robust labor market and stronger-than-anticipated economic growth.

The Dow Jones Industrial Average closed down 1.1% at 33,027.49, while the broader S&P 500 Index declined 1.5% to 3,829.

The technology-heavy Nasdaq Composite Index fell 2.2% to 10,476.12.

Edward Moya of the OANDA trading platform referred to the decline as a “Grinch selloff,” explaining that “better-than-expected US economic data supported the (Federal Reserve’s) case for more ongoing rate increases.”

This year, the Fed has raised its benchmark lending rate three times to combat soaring inflation.

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Fed Chair Jerome Powell has suggested that the central bank’s war is not yet done, causing market concerns despite the fact that the Fed slowed the pace of rate hikes this month.

According to Nancy Vanden Houten of Oxford Economics, Thursday’s nonfarm payrolls report was “a reminder that employers overall still aren’t laying off large numbers of workers” despite difficult economic conditions.

In the meantime, revised figures from the Commerce Department revealed that the US economy grew by 3.2% in the third quarter, far more than the 2.6% anticipated in October.

Inflation might remain elevated if the economy remains robust, compelling the Federal Reserve to continue with rapid rate hikes and maintain them at higher levels for longer.

For the time being, investors are keeping a close eye on the personal consumption expenditures price index data that will be released on Friday, watching for changes in the Fed’s favored inflation measure for indications of its future trajectory.

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