Stocks fell on Thursday after strong jobs data sparked fears of further interest rate hikes from the Federal Reserve, reigniting worries about the impact of those hikes on the economy.
The S&P 500 (^GSPC) was down about 0.8%, while the Dow Jones Industrial Average (^ DJI) fell 1.08%, or about 370 points. The technology-focused Nasdaq Composite (^IXIC) fell 0.9%.
All three major benchmarks posted losses on Wednesday, after being surprisingly hawkish minutes from the fed’s june meeting showed that some decision-makers were reluctant to support a pause that was finally decided. Almost all supported more increases in 2023.
Markets now see a 95% chance of a rally at the Fed’s July meeting, FedWatch CME Tool, after new data released on Thursday signaled that the US labor market is still robust. ADP’s payroll in the private sector was well above estimates.
Given that equities have already faced headwinds amid concerns that Fed rate hikes could tip the economy into recession, the data will serve as an appetizer for the crucial June jobs report out Friday.
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