Stocks fell as investors weighed the latest move in rates and awaited the U.S. jobs report

U.S. stocks fell on Thursday as traders weighed sharper swings in stocks and rates to start the month.

The S&P 500 fell 0.45%, while the Nasdaq composite fell 0.11%. The Dow Jones Industrial Average lost 165 points, or 0.55%. Three stock criteria cut the session short. All major averages are on pace to end the week more than 4% higher.

Energy was the best performing sector, gaining 1.3%. Utilities lagged behind, falling more than 2%.

The benchmark 10-year rate rose 5 basis points to 3.809%. The 2-year yield, which is more sensitive to monetary policy changes, rose 6 basis points to 4.216%.

Investors are eagerly awaiting Friday’s jobs report, which will show how the labor market fared in September and give the central bank another clue about its rate hike campaign.

Data from ADP on Wednesday showed that the labor market among private firms remained strong in September, when businesses added 208,000 jobs, beating Wall Street estimates. But on Thursday, jobless claims were higher than expected, suggesting some weakness in the labor market.

“Once again, investors are looking for bad news as good news,” Wolff Research’s Chris Senyek wrote in a Thursday note, even if the September report came in lower than expected, halting wage growth and setting a precedent. The Federal Reserve is unlikely.

“While stocks are currently exposed to major upside distortions, we strongly believe that our medium-term bullish base case remains intact,” he added.

Wall Street started the week higher, with the S&P 500 staging its biggest two-day rally since 2020. Shares struggled to continue Wednesday’s gains, but eventually fell. The Dow was down about 42 points, or 0.14%. The S&P 500 and Nasdaq Composite fell 0.20% and 0.25%, respectively.

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