Stock market today: Wall Street falls as pressure from the bond market stays high
Wall Street is slipping Thursday as pressure from the bond market remains high due to worries about a too-hot U.S. job market
NEW YORK — Wall Street is slipping Thursday, as pressure from the bond market stays high due to worries about a too-hot U.S. job market.
The S&P 500 was 0.7% lower in midday trading, a day before a highly anticipated report on the job market that could sway where the Federal Reserve takes interest rates. The Dow Jones Industrial Average was down 145 points, or 0.4%, as of 11:30 a.m. Eastern time, and the Nasdaq composite was 0.9% lower.
Stocks have struggled since the summer under the weight of soaring Treasury yields in the bond market, which undercut stock prices and crimp corporate profits. Yields have leaped as traders acquiesce to a new normal where the Federal Reserve is likely to keep its main interest rate at a high level for a long time, as it tries to extinguish high inflation.
Treasury yields wavered up and down Thursday after a report showed fewer U.S. workers applied for unemployment benefits last week than economists expected. That’s a sign fewer workers are getting laid off than expected, which is normally a good sign.
But the worry now is that too strong of a job market could put upward pressure on inflation. That’s why the Fed has raised its main interest rate to the highest level since 2001, to intentionally slow the job market.
“Even as the Fed has taken aggressive action to soften labor market conditions, businesses continue to hold on to workers,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
A more comprehensive report on the overall U.S. job market is due Friday, and economists expect it to show hiring slowed to a pace of 163,000 jobs in September
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