Updated at 4:15 p.m. ET
Shares ended lower on Wednesday as the dollar leaned on gains against its global peers amid fears that surprisingly strong jobs data, along with record inflation in Europe, could keep the Fed on its rate hike path heading into the second half of the year.
Yesterday’s Department of Labor Job Openings and Labor Turnover Survey, known in the market as JOLT, showed that nearly 11.24 million jobs were not were not filled last month, nearly two for every unemployed person in the country.
The reading, along with an upward revision for June, added further pressure on rate hike bets as investors priced in the potential for higher wages, needed to entice Americans back into the labor market. work, in order to continue fueling inflation.
The CME Group’s FedWatch now points to a 72.5% chance of a 75 basis point rate hike next month in Washington, adding to hawkish rhetoric from Fed Chairman Jerome Powell last week in Jackson. Hole.
US consumer confidence also rose sharply in August, according to the widely watched Conference Board survey, amid an improving job market and falling gasoline prices.
The contrast with growth prospects in other economies, particularly China, also adds bullish momentum to the dollar, which lost 0.3% in early trading in New York against a basket of its global peers to change course. hands at 108.74.
Benchmark 10-year Treasury yields, meanwhile, were set at 3.179%.
Economic activity in China, in fact, has slowed considerably this month, according to the official PMI released on Wednesday, as Beijing’s lockdown rules against Covid, along with some of the hottest weather on record, pushed the sector manufacturer of the country to contract.
The data pushed Chinese stocks back into the red on Tuesday, as the Nikkei 225 fell 0.52% in Tokyo after Wall Street sold off last night.
In Europe, stocks fell 0.68% in Frankfurt after a record inflation reading in August and a big jump in rate hike expectations from the European Central Bank, which meets Sept. 8 in Frankfurt.
Europe’s headline inflation rate was estimated at 9.1% for August, beating analysts’ forecast of a reading of 9% and accelerating firmly beyond the 8.9% recorded in July for the 19 countries that share the single currency.
By removing the prices of food, energy, alcohol and tobacco, so-called core inflation was set at 4.3%, another all-time high.
On Wall Street, the S&P 500 ended down 0.78%, while the Dow Jones Industrial Average fell 280 points, 0.88%, to 31,510. The tech-focused Nasdaq lost 0 .56%.
Payroll processing group ADP said in its National Jobs Report that private sector jobs rose by 132,000 last month, well below Wall Street forecasts of a gain of 288,000, in using a new methodology that ADP says will provide a “more robust, high-frequency view.” labor market and economic growth trajectory.
In other markets, U.S. gasoline futures fell back to levels last seen before Russia invaded Ukraine overnight Wednesday, prompting further declines in prices at the pump before Labor Day weekend.
Gasoline futures for September delivery fell 6 cents in European trading to $2.633 a gallon after settling last night at $2.6944, the lowest since February 18.
Weak manufacturing data from China, the world’s largest energy importer, is also putting pressure on global crude prices, with WTI futures for October down $1.00 at $90.58. the barrel.
In terms of individual stocks, HP (HPQ) Shares fell 7.8% after the PC and peripherals maker posted weaker-than-expected second-quarter earnings and a disappointing near-term earnings outlook.
Snap inc. (INSTANTANEOUS) Shares gained 8.6% after the messaging app maker lost two of its top advertising executives to streaming giant Netflix while confirming reports that it plans to cut more than 1,200 jobs.
Bed, bath and beyond (BBBY) shares fell 21.3% as the struggling home goods retailer sought permission to sell more shares as part of a capital-raising plan while disclosing details of its plans to long-awaited turnaround.