Wall Street Drops in Prep for Jobs Report and Fed Comments
Fed officials were cautious in their comments on the outlook for interest rate cuts, and investors were bracing for Friday’s U.S. monthly jobs report. As a result, all three major U.S. stock indexes fell more than 1%, with the S&P 500 experiencing its biggest daily percentage drop since Feb. 13.
The remarks made by U.S. President Joe Biden, who demanded an immediate end to the Gaza war in a phone conversation with Israel’s Prime Minister Benjamin Netanyahu, were also taken into consideration by investors. In the midst of the geopolitical turmoil, oil prices rose.
Technology lost 1.7% on the day, leading all major S&P 500 sectors lower, while defense-related stocks, like Lockheed Martin’s, rose.
Neel Kashkari, president of the Minneapolis Fed Bank, indicated that he had planned to decrease interest rates twice this year during last month’s meeting of the US central bank, but that if inflation stays low, that might change.
Richmond Federal Reserve President Thomas Barkin earlier Thursday stated that the US central bank can wait for inflation concerns to subside before implementing rate cuts.
U.S. Federal Reserve Chairman Jerome Powell and other Fed members maintained their cautious approach to cutting interest rates on Wednesday. According to Paul Nolte, a senior wealth adviser and market strategist with Murphy & Sylvest in Elmhurst, Illinois, it’s a methodical and deliberate strategy. Above all, he remarked that “there’s some nervousness coming into that (jobs) report” on Friday.
On November 1st, the Cboe Volatility Index (.VIX) reached its all-time high value. Early in the day, stock prices rose on the back of U.S. unemployment claims data that provided support for the idea of a rate cut. New claims for unemployment benefits filed by Americans surged last week, according to the data.
The following indexes saw losses: the DJIA (530.16 points, or 1.35% of the total) fell to 38,596.98, the SPX (64.28 points, or 1.23% of the total) fell to 5,147.21, and the IXIC (228.04 points, or 1.4% of the total) fell to 16,049.08.
Additional insights into the job market and inflation may be revealed in Friday’s employment statistics.
Reuters surveyed economists who anticipate a decline in nonfarm payrolls to 200,000 in March from 275,000 in February and a stable unemployment rate of 3.9%.
As per the CME Group’s FedWatch tool, money markets continue to anticipate a nearly 60% likelihood of a minimum 25 basis point rate drop in June.
The apparel maker’s recent cost-cutting initiatives and fewer discounts led to an increase in its yearly profit prediction, which led to a 12.4% increase in Levi Strauss shares.
In comparison to the full-session average of 11.73 billion shares over the past 20 trading days, the volume on U.S. exchanges was 11.99 billion shares. On the New York Stock Exchange, declining issues outnumbered advancing ones by a ratio of 1.76 to 1; on the Nasdaq, the downside had the upper hand by a ratio of 1.69 to 1.
Of the 108 new 52-week highs and 98 new lows recorded by the Nasdaq Composite, 55 were made by the S&P 500 and 6 by the Nasdaq Composite.
