Wall Street collapses this Thursday, as bond market pressure remains high due to concerns about a labor market Strong American.
He S&P 500 down 0.7%, the latest stumble in what has been a terrible stretch since early August. He Dow Jones Industrial Average loses 0.4%, and the compound Nasdaq gives 1%.
Equities have suffered since the summer the weight of rising Treasury yields in the bond market, which reduces stock prices and company profits. Yields have soared as traders accept a new normal in which the Federal Reserve keep its main interest rate at a high level for a long time, while trying to extinguish high inflation.
Treasury Yields swing up and down on Thursday, after a report show that fewer American workers applied for unemployment benefits last week than economists expected. This indicates that fewer workers are being laid off than expected, which is usually a good sign.
Wall Street: the data that the market looks at
But the worry now is that a labor market that is too strong could put more upward pressure on inflation. That’s why the Federal Reserve has raised its main interest rate to the highest level since 2001, to intentionally slow down the labor market.
A more comprehensive report on the broader U.S. labor market will be released on Friday, and economists expect it to show that hiring slowed to a pace of 163,000 jobs in September, down from 187,000 in August. Perhaps just as important, economists expect the report to show that average workers’ wages rose 4.3% in September, a similar rise to August.
After the initial spike caused by the unemployment benefits report, 10-year Treasury yields subsequently fell. The 10-year yield stood at 4.71%, up from 4.73% on Wednesday. Earlier this week, it hit its highest level since 2007.
The 10-year Treasury bond rate It is the centerpiece of the fixed income market, and movements in its performance impact the entire economy. Likewise, the recent decline in the price of oil meant some relief on the inflation front, both for US households and the Federal Reserve.
Source: Ambito
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