NEW YORK –
Stocks opened lower on Wall Street on Friday after much stronger-than-expected hiring data from the Labor Department. The S&P 500 is down 0.8% at the opening bell and the Nasdaq is down more than one percent. Dow Jones industrial stocks are also falling. Labor Department figures show U.S. employers added 528,000 jobs last month, restoring all the jobs lost during the coronavirus recession, while unemployment fell to the lowest since the pandemic erupted early of 2020. The hiring boom suggests that the Fed may continue to fight inflation aggressively. Shares of Warner Bros. Discovery is having its third-worst day after announcing weak second-quarter results.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier history appears below.
Shares in the United States fell in premarket trading after a hotter-than-expected hiring report suggested the Federal Reserve will need to remain aggressive in its efforts to fight inflation.
S&P 500 futures fell 1% after rising slightly just before the Labor Department released its latest jobs figures, which showed a gain of 528,000 jobs, against an expectation of a gain of 250,000 jobs.
The Dow Jones Industrial Average fell 0.7% and the Nasdaq 1.3%. Bond yields jumped, with the 2-year Treasury yield hitting 3.2%. The yield on 10-year Treasury bills rose to 2.81%. Yields had fallen on expectations that the Fed could slow the pace of rate hikes somewhat as the U.S. economy slowed, giving the stock market a boost.
Markets in London, Paris and Frankfurt fell while Shanghai and Tokyo rose. Oil prices have fallen.
The Fed has raised its benchmark rate twice by 0.75 percentage points this year, three times its usual margin and the biggest increases since the early 1990s.
Investors fear that rate hikes by the Fed and other central banks in Europe and Asia to rein in inflation that is at multi-decade highs could derail economic growth.
Fed officials have tried to calm fears that the United States could tip into a recession by pointing to a strong labor market as evidence that the economy can tolerate higher borrowing costs.
In Asia, the Shanghai Composite Index rose 1.2% to 3,227.03 and Hong Kong’s Hang Seng gained 0.1% to 20,201.94.
The Nikkei 225 in Tokyo gained 0.9% to 28,175.897 after labor incomes in June rose 2.2% year on year, although forecasters warned the strength was unlikely to last. Much of the increase is due to semi-annual bonuses which are paid in June.
Seoul’s Kospi gained 0.7% to 2,490.80 and Sydney’s S&P ASX 200 rose 0.6% to 7,015.60.
India’s Sensex rose 0.1% to 58,381.11 after the Reserve Bank of India raised its benchmark interest rate by half a percentage point to 5.4%. Central bank governor Shaktikanta Das predicts economic growth of 7.2% for the year to March and inflation of 6.7%.
New Zealand and Bangkok fell while Singapore rose.
Jakarta rose 0.4% after Indonesia’s economy grew stronger than expected by 5.4% year-on-year in the last quarter.