Wall Street dropped this afternoon after weaker-than-expected jobs figures signalled a softer US economy. The S&P 500 slipped 0.1%, the Nasdaq lost 0.2%, while the Dow Jones Industrial Average traded flat.
Despite the weaker labour market outlook, investors maintained bets that the Federal Reserve will cut interest rates later this year.
Wall Street Slips After Jobs Revision, Fed Cut Bets Hold Firm
The S&P 500 and Nasdaq edged lower this afternoon, giving back some ground after closing near record highs yesterday, while the Dow Jones traded flat.
Investor sentiment softened after a sharp downward revision to US jobs data suggested the economy created 911,000 fewer jobs in the year to March than previously estimated. Despite the weaker backdrop, market bets on a quarter-point interest rate cut by the Federal Reserve next week remain firmly in place, while the odds of a larger half-point move are steady at around 10%.
Chris Kampitsis, managing partner at Barnum Financial Group, said:
“Given the recent softness in the labour market data, even if we were to see elevated inflation data this week, the Fed would cut rates next week. But that would be a ‘one and done’ rate cut, especially if inflation data remains elevated in the near-term.”
By mid-afternoon, the S&P 500 was down 0.1%, the Nasdaq slipped 0.2%, and the Dow Jones remained little changed.
Wall Street’s benchmark S&P 500 index has climbed 10.5% so far this year, bouncing back strongly after a rough spell in March and April, when markets slid on fears triggered by Donald Trump’s proposed global trade war.
