Wall Street: Nasdaq and S&P 500 up after employment data and drop in bond rates

In Wall Streetand l S&P 500 rises 0.3%. He Dow Jones Industrial Average loses 0.7%, and the composite index Nasdaq rises 0.7%.

Stocks are weighed down by rising Treasury yields, which are hitting their highest levels in more than a decade. The high yields undermine stock prices, since they distance investment dollars from stocks and direct them towards bonds. They also reduce business profits by making borrowing more expensive.

The yield on the 10-year Treasury bond, which is the centerpiece of the fixed income market, falls from its highest level since 2007, to 4.76% from 4.80% recorded late Tuesday. Short and long term returns They also relax a little to offer more oxygen to the stock market. Yields fall and then trim losses after a pair of mixed reports on the economy. The first indicates that hiring by companies outside the public sector is lower than expected last month.

At the moment, A cooling of the labor market is expected on Wall Street, since that could mean less upward pressure on inflation. This, in turn, could convince the Federal Reserve to lower rates interest rates.

After raising its main interest rate to the highest level since 2001, the Federal Reserve says it could keep rates on hold higher next year than previously anticipated. As a result, Treasury bond yields have risen as traders accept the new normal of higher rates for longer.

The Fed is paying special attention to the labor market, as excessive strength could raise workers’ wages much morewhich they fear could keep inflation well above their 2% target.

Wednesday’s report from ADP suggests that private employers added 89,000 jobs last montha much more pronounced slowdown in hiring than the 140,000 that economists expected.

Wall Street: the data that the market expects

The report doesn’t have a perfect track record in predicting what the U.S. government’s most comprehensive jobs report will say. He will arrive on Friday.

But “If Friday’s report also shows that the labor market is cooling, stock investors might worry a little less about indefinitely higher interest rates.“says Mike Loewengart, head of model portfolio construction at the Morgan Stanley Global Investment Office.

A second report on the economy indicates that growth of US service companies slows in September, a little more than economists expected.

It also offers some indications of inflationary pressuresince the prices paid by service companies increased last month at a similar rate to that of August.

Oil prices fall on Wednesday to ease inflation. Benchmark US crude oil falls 2.9% to $86.64 per barrel. It has been regressing since it reached the 93 dollars last week. Brent crude oil the international standardloses 2.8%, to $88.40.

In general, Crude oil prices have been rising from $70 in the summerfollowing the announcements of production cuts by some producing countries.

Wall Street is also coming to terms with the removal of Kevin McCarthy as speaker of the House of Representatives. The unprecedented move to remove a House speaker is unlikely to change things much in the short term, with US government funding set until November 17.

“That said, a leadership vacuum in the House increases the likelihood of a government shutdown when the current funding extension expires.”“, according to economists at Goldman Sachs.

A shutdown could weigh on the U.S. economy and increase the risk of recession, although financial markets have weathered previous shutdowns relatively well.