Wall Street slips after US jobs report raises rate hike fear

Wall Street is slipping Monday in the first trading for stocks after a report raised speculation the Federal Reserve may still tap the brakes a little harder on the economy. The S&P 500 was 0.7% lower in early trading. It did not trade on Friday, when the U.S. government said job growth across the economy remains resilient despite slowing a touch more than expected last month. The Dow and Nasdaq are also falling. Stocks were catching up to the bond market, which on Friday built expectations for the Fed to raise rates at its next meeting.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.

Shares were mostly higher in Asia on Monday after a report Friday showed resilience in the U.S. jobs market. European markets were closed for Easter holidays.

Benchmarks rose in Tokyo and Seoul but fell in Shanghai. Markets were closed in Hong Kong and Sydney. U.S. futures were mixed and oil prices climbed.

The highly anticipated report on U.S. employment showed hiring slowed more than expected but remained steady last month.

Friday’s jobs report showed that American employers added 236,000 jobs last month, a slowdown from February’s 326,000 and slightly below economists’ expectations. Wages, meanwhile, grew 0.3% from February to match expectations. But year-over-year wage gains slowed to 4.2% from 4.6%.

Asian central banks are also struggling to steer the delicate course of curbing inflation while avoiding putting economies into recession.

In Asian trading Monday, Tokyo’s Nikkei 225 index added 0.4% to 27,633.66. In Seoul, the Kospi surged 0.9% to 2,512.08

The Shanghai Composite index gave up early gains, losing 0.4% to 3,315.36. Shares rose in Taiwan but fell in Southeast Asia.

The Federal Reserve faces a tough decision over whether to raise interest rates to drive down inflation that’s still high or hold off given signs of a slowing economy.

“I suspect we are entering the peak uncertainty phase around the Fed’s next move as investors debate if credit tightening from financial stress will be enough to warrant cuts or if we are heading for more hikes,” Stephen Innes of SPI Asset Management said in a commentary.

The U.S. stock market was closed in observance of Good Friday, as were many markets across Europe. That left the U.S. bond market as one of the few open to react to the latest jobs update.

The immediate reaction from the bond market seemed to lean toward another hike. Not only did yields rise for Treasurys, so did bets for the Fed to raise rates by another quarter of a percentage point in May at its next meeting.

The yield on the 10-year Treasury climbed to 3.40% from 3.30% late Thursday. It was at 3.36% early Monday.

Raising rates is one of the Fed’s most effective ways to undercut inflation, but it’s a notoriously blunt tool that works only by slowing the entire economy. That raises the risk of a recession and hurts prices for stocks, bonds and other investments.

More data are coming this week, with the latest monthly update on prices consumers are paying on Wednesday. Economists expect it to show inflation slowing but well above the Fed’s target.

Many economists see a recession later this year as likely. But some say a narrow possibility still exists where the Fed could raise rates just enough to get inflation fully under control without causing a severe recession.

In other trading, U.S. benchmark crude gained 20 cents to $80.90 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, picked up 13 cents to $85.25 per barrel.

The dollar fell to 132.10 Japanese yen from 132.16 yen. The euro rose to $1.0911 from $1.0902.

Leave a Reply

Your email address will not be published. Required fields are marked *

Interested in advertising with us?

We’d love to have you on the team! Drop us a line and we’ll be happy to follow up. 


Let's Connect

Follow along on your favorite social media platform and get the latest updates directly in your feed!

Got a tip on a story?

Submit a Tip

Have a tip on a story? Send it directly to our team using the form below!