New York (AFP) – Weak US jobs data cemented expectations of an interest rate cut later this month on Friday, but stocks slid on worries about the economic outlook and profit-taking. Wall Street’s three main indices opened in positive territory after official data showed the US economy added 22,000 jobs last month, down from July’s 79,000 figure. But then they quickly turned lower.
Analysts had expected the figures to confirm a cooled labor market as companies pull back on hiring amid ongoing uncertainty over President Donald Trump’s tariffs. Ahead of the figures, the market had already largely priced in an interest rate cut of a quarter percentage point, or 25 basis points, when the US Federal Reserve holds its monetary policy meeting later this month. However, the numbers were well below the 77,000 jobs analysts had expected. All three major US indices ended lower, with the S&P 500 down 0.3 percent.
“An initially positive reaction to today’s weak payrolls report has given way to some classic ‘buy the rumor, sell the fact’ action,” said Chris Beauchamp, chief market analyst at investing and trading platform IG. Oxford Economics moved up its projection for a Fed rate cut to September after previously predicting one in December. “We don’t know how much longer this slowing of hiring is going to last,” said Art Hogan of B. Riley Wealth Management.
The jobs data also sent the dollar and US Treasury yields lower, while gold hit a new record high. Gold has benefitted as a refuge for investors turning away from long-term bonds, which have recently been hit by concerns about debt sustainability. Gloomy economic data has recently supported stocks as investors see it as boosting chances the Fed will cut interest rates, which is positive for businesses. However, “as concerns about the economy grow, we could see stocks struggle,” warned Kathleen Brooks, research director at trading group XTB.
European stocks ended the day lower. Tokyo also climbed after Trump signed an order to lower tariffs on Japanese autos to 15 percent from 27.5 percent. Oil prices extended losses in anticipation of excess supply in the coming months as OPEC+ nations, which include Saudi Arabia and Russia, are expected to further unwind production cuts this weekend. Oil has tumbled more than 12 percent this year as global producers outside OPEC+ ramp up supply and tariffs curb demand.
Shares in Tesla climbed 3.6 percent after the board of the US electric vehicle maker proposed a pay package for CEO Elon Musk that could top $1 trillion if certain performance milestones are met.
– Key figures at around 2130 GMT –
New York – Dow: DOWN 0.5 percent at 45,400.86 (close)
New York – S&P 500: DOWN 0.3 percent at 6,481.50 (close)
New York – Nasdaq Composite: DOWN less than 0.1 percent at 21,700.39 (close)
London – FTSE 100: DOWN 0.1 percent at 9,208.21 (close)
Paris – CAC 40: DOWN 0.3 percent at 7,674.78 (close)
Frankfurt – DAX: DOWN 0.7 percent at 23,596.98 (close)
Tokyo – Nikkei 225: UP 1.0 percent at 43,018.75 (close)
Hong Kong – Hang Seng Index: UP 1.4 percent at 25,417.98 (close)
Shanghai – Composite: UP 1.2 percent at 3,812.51 (close)
Euro/dollar: UP at $1.1722 from $1.1649 on Thursday
Pound/dollar: UP at $1.3508 from $1.3434
Dollar/yen: DOWN at 147.07 yen from 148.49 yen
Euro/pound: UP at 86.77 from 86.71 pence
West Texas Intermediate: DOWN 2.5 percent at $61.87 per barrel
Brent North Sea Crude: DOWN 2.2 percent at $65.50 per barrel
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© 2024 AFP
