Investors await inflation data after Wall Street rallies on signs of labour market weakness
A sharp downward revision to US jobs data signalled weakening labour conditions and fuelled expectations of Federal Reserve rate cuts, while Wall Street’s main indexes climbed to fresh records.
The Bureau of Labor Statistics said the economy created 911,000 fewer jobs in the 12 months through March than previously estimated, the largest revision since 2002, reported CNBC.
JPMorgan Chase chief executive Jamie Dimon said, “I think the economy is weakening. Whether it’s on the way to recession or just weakening, I don’t know.”
Market strategist Paul Nolte of Murphy & Sylvest told Reuters the revision “does nothing to dissuade the Fed from moving 25 basis points,” adding that while monthly clarity is lacking, the data points to labour weakness.
According to CME’s FedWatch tool, financial markets have priced in a 25 basis point cut next week and nearly a 10 percent chance of a 50 basis point move, reported Reuters.
Brian Jacobsen, chief economist at Annex Wealth Management, said to BNN Bloomberg that “the more likely course is for the Fed to deliver an October and December cut rather than trying to deliver a catchup cut in September.”
All three major indexes closed at all-time highs Tuesday, with the S&P 500 up 0.27 percent to 6,512.61, the Nasdaq gaining 0.37 percent to 21,879.49, and the Dow Jones Industrial Average climbing 0.43 percent to 45,711.34, reported Reuters.
Year-to-date, the S&P 500 has risen about 11 percent and the Nasdaq 13 percent.
Investors are now focused on the producer price index due Wednesday and the consumer price index Thursday.
Art Hogan, chief market strategist at B. Riley Wealth Management, told CNBC that US inflation data “would have to be remarkably hotter than anticipated for anything to change the narrative that we’re getting a rate cut in September.”
Company results added momentum.
UnitedHealth shares jumped after reaffirming its 2025 profit forecast, reported BNN Bloomberg.
Oracle surged 12 percent in extended trading, with executives highlighting 1,529 percent growth in multicloud database revenue from Amazon, Google, and Microsoft, according to CNBC.
Nebius climbed almost 50 percent after signing a US$17.4bn deal with Microsoft, while Broadcom fell 2.6 percent after earlier gains and Apple slipped 1.5 percent following its new iPhone launch, reported Reuters.
In media, Rupert Murdoch’s family reached an agreement granting Lachlan Murdoch control of Fox Corp. and News Corp., sending their shares down 6.7 percent and 4.5 percent, as per Reuters.
Albemarle dropped 11.5 percent on easing lithium supply concerns tied to China’s CATL.
International markets were mixed, with France’s CAC 40 up 0.2 percent and Japan’s Nikkei 225 down 0.4 percent amid political uncertainty, reported BNN Bloomberg.
