U.S. stocks lagged Thursday ahead of monthly jobs data as traders failed to build momentum after a rally fueled by Fed Chairman Jerome Powell’s indication of a slowdown rate hikes.
The S&P 500 (^GSPC) slipped 0.1%, while the Dow Jones Industrial Average lost 200 points, or 0.6%. The tech-heavy Nasdaq Composite was an outlier, closing up 0.1%. In other pockets of the market, the US dollar index retreated as the greenback posted its worst monthly performance in more than a decade, and US Treasury yields held steady after steep declines.
Investors are eagerly awaiting the Labor Department’s November jobs report, due out at 8:30 a.m. ET on Friday. Economists polled by Bloomberg expect payrolls to have risen by 200,000 last month while the jobless rate held steady at 3.7%.
On the economic data front Thursday, the core personal consumption expenditure (PCE) price index – a measure of inflation closely watched by the Federal Reserve – rose 0.2% in October, less than expected. and another sign of slowing inflation.
Meanwhile, unemployment insurance filings fell last week, holding near all-time lows. Initial jobless claims, the most timely snapshot of the labor market, stood at 225,000 for the week ended Nov. 26, down 16,000 from the revised level of the previous week, Thursday showed. Department of Labor figures.
Thursday’s moves in stocks follow bursts through the previous session’s leading averages on the heels of a speech by Powell in Washington, D.C., in which he signaled that U.S. central bank officials may lower the latest interest rate hike for the year later this month to 50 basis points. Wednesday saw the S&P 500 rebound 3.1%, the Dow Jones rise 2%, or more than 700 points – and exit a bear market – and the Nasdaq jump 4.4%.
“It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” Powell said, speaking at the Brookings Institution, while acknowledging the “mismatches uncertain” of monetary tightening. “The time to moderate the pace of rate hikes could come as early as the December meeting.”
Powell’s comments are likely the last public remarks he will make before Federal Reserve officials enter a blackout period — a period when policymakers limit public speaking ahead of a board meeting. policymaking – ahead of their next gathering on December 13-14.
“The focus should no longer be on the pace, but on the degree to which rates rise and how long they have to stay there,” said Jason England, global bond portfolio manager at Janus Henderson Investors, in a note. “As the Fed will have to see ‘much more evidence’ that inflation is falling before pausing and Powell ended his speech by saying ‘history is a strong warning against premature policy easing’, pricing reductions is premature.”
Sentiment was also bolstered on Thursday by easing concerns over zero-COVID unrest in China after senior government official Deputy Prime Minister Sun Chunlan called for an “optimization” of the country’s virus response. as pathogenicity wanes.
Meanwhile, on the corporate side, all eyes were on Salesforce (CRM) following the announcement that co-CEO Bret Taylor would step down in January and co-founder Marc Benioff would become sole CEO. . The shares fell 8%.
Shares of Snowflake (SNOW) rose nearly 8%, even as the company’s fourth-quarter product revenue forecast missed estimates on an expected slowdown in technology spending.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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