Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. March 30, 2022. REUTERS/Brendan McDermid
- US yield curve inverts after strong jobs data
- Unemployment falls to 3.6% vs. 3.7% estimate
- Non-farm payrolls rose 431,000 jobs last month
- GameStop is targeting a stock split amid renewed meme stock hype
- Indices down: Dow 0.22%, S&P 0.28%, Nasdaq 0.32%
April 1 – Wall Street’s main indices tumbled on Friday as the latest monthly jobs report signaled the resilience of the US economy and bolstered the case for aggressive monetary tightening by the Federal Reserve.
The Labor Department’s closely watched jobs report showed that the US job market tightened rapidly while the unemployment rate fell.
US employers added 431,000 jobs in March. While the numbers fell short of economists’ expectations, the unemployment rate fell to 3.6%, its lowest since February 2020, and the average hourly wage rose 0.4%. Continue reading
“This was a pretty solid report. Inflation is obviously still an issue and certainly doesn’t change what the Fed is likely to do,” said Randy Frederick, managing director, trading and derivatives at the Schwab Center for Financial Research.
“I think we’ve already been told, not explicitly but pretty close, that we’re going to get a half-point rate hike in May.”
Traders now see a 72.8% chance of a 50 basis point rate hike in May. The US Federal Reserve hiked rates by 25 basis points last month for the first time since 2018, and policymakers have signaled their readiness for aggressive rate hikes to combat decades-high inflation.
US Treasury yields surged and a closely watched portion of the yield curve inverted again after the data, dragging bank stocks (.SPXBK) down 0.9%. Lenders often borrow short-term and lend long-term, making money on the different interest rates when the curve is tilted. Continue reading
The data also showed that US manufacturing activity slowed unexpectedly in March as tight supply chains continued to push up input prices. Continue reading
Six of the S&P 500’s 11 major sectors rose in midday trade, led by gains in real estate (.SPLRCR) and energy (.SPNY).
At 12:26 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 76.48 points, or 0.22%, to 34,601.87, the S&P 500 (.SPX) was down 12.50 points, or 0.28% 4,517.91 and the Nasdaq Composite (.IXIC) fell 45.64 points, or 0.32%, to 14,174.88.
Indexes ended the first quarter on Thursday with the largest quarterly decline in two years as concerns continued over the ongoing conflict in Ukraine and its inflationary impact.
Video games retailer GameStop Corp (GME.N), at the center of a social media-fueled trading frenzy over the past year, rose 4.7% after it planned to seek shareholder approval for a stock split. Continue reading
Apple Inc (AAPL.O) fell 1.1% after JP Morgan removed the stock from its analysts’ “focus” list, while Tesla Inc (TSLA.O) climbed 0.1% higher ahead of its quarterly deliveries report.
For a 1.17 to 1 ratio on the NYSE and a 1.12 to 1 ratio on the Nasdaq, ascending issues outweighed the decliners.
The S&P index posted seven new 52-week highs and seven new lows, while the Nasdaq posted 49 new highs and 91 new lows.
Reporting from Amruta Khandekar, Bansari Mayur Kamdar and Devik Jain in Bengaluru; Edited by Arun Koyyur and Shounak Dasgupta