Wall St slides 1% as labor data stokes rate hike concerns
By Bansari Mayur Kamdar and Johann M Cherian
(Reuters) — Wall Street tumbled on Thursday as data signaling a resilient labor market and hawkish minutes of the Federal Reserve's June meeting fanned fears the central bank could keep interest rates higher for longer.
Private payrolls increased more than expected in June, the ADP National Employment report showed, indicating the labor market remained strong despite growing risks of a recession from higher interest rates.
Another survey showed the number of Americans filing new claims for unemployment benefits increased moderately last week.
«The Fed has been hopeful to see a modest deterioration in the labor market,» said Randy Frederick, managing director of trading and derivatives for Charles Schwab (NYSE:SCHW).
«But since the ADP number was almost twice of what was expected, it generally implies there's potential for more rate hikes going forward.»
Money market traders now see a near 95% chance of a quarter-point hike at the bank's next meeting on July 26, up from 90.5% earlier in the day, according to CME's Fedwatch tool.
Dallas Fed President Lorie Logan, a voting member of the Fed's rate-setting committee, said on Thursday «it would have been entirely appropriate» to raise rates at the June policy meeting itself.
All 11 major S&P 500 sectors were in the red in early trading, with technology stocks leading declines, down 0.9%.
Meta Platforms rose 0.6% as it took aim at Twitter with its Threads app that attracted millions of users within hours of its launch on Wednesday.
U.S. stock indexes had slipped in the previous session after the Fed minutes showed a vast majority of the policymakers expected further policy tightening, even as they agreed to hold rates steady in
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