Check back for updates throughout the trading dayU.S. stocks slumped lower in early Friday trading as investors parsed details of a crucial August jobs report that could both clarify the Federal Reserve's rate path and provide a litmus test to concerns that economic growth is slowing into the autumn months. Updated at 10:45 AM EDTBack in the redModest early gains have given way to another stock pullback, with the S&P 500 down 68 points, or 1.23% and the Nasdaq falling 335 points, or 1.95%.Bond markets are also active, with rate-sensitive 2-year note yields easing to 3.673% and benchmark 10-year Treasury yields falling to 3.680%. "Friday's jobs report shows that the labor market is continuing at a sturdy, but slowing pace, and that gives the Federal Reserve the ability to cut interest rates by either 25 or 50 basis points at the September meeting," said Carol Schleif, chief investment officer at BMO Family Office. "Part of the Fed's decision on how deep of a rate cut to initiate in September will also depend on the August CPI report, which is released next week," she added.Especially after the excitement of a month ago, when analysts and economists suddenly jacked up their probability of an economic recession, this morning’s (August) US jobs report comes as a relief… that is unless you were absolutely convinced that the Federal Reserve would cut…— Mohamed A. El-Erian (@elerianm) September 6, 2024
Updated at 9:39 AM EDTMixed openThe S&P 500 was marked 6 points, or 0.11% higher in the opening minutes of trading, with the Nasdaq dipping 60 points, or 0.3%. The Dow, meanwhile, jumped 215 points while the small-cap Russell 200 index gained 6 points, or 0.13%.S&P 500 Opening Bell Heatmap (Sept. 06, 2024)$SPY +0.12%?$QQQ -0.34%?$DJI +0.29%?$IWM +0.16%? pic.twitter.com/BelXPqDrXM— Wall St Engine (@wallstengine) September 6, 2024
Updated at 8:44 AM EDTIt's a cool, cool summer The economy added a fewer-than-expected 142,000 new jobs last month, with downward revisions to June and July tallies, indicating a clear cooling momentum in the labor market. The BLS report also noted nudgingly higher earnings on both a monthly and annual basis, but the big revisions and headline miss are likely to cement the case for a big Fed rate hike later this month in Washington.U.S. stocks pared their earlier declines following the data release, with futures tied to the S&P 500 indicating and opening bell decline of around of around 17 points while those linked to the Dow Jones Industrial Average suggests a 125 point pullback. The Nasdaq, meanwhile, was indicated 125 points lower.Benchmark 10-year Treasury note yields fell 3 basis points to 3.689% following the data release, the lowest since December of last year, while rate-sensitive 2-year notes fell 5 basis points to 3.661%.Payrolls by sector pic.twitter.com/NxWOYWc1CB— Liz Ann Sonders (@LizAnnSonders) September 6, 2024
Stock Market TodayStocks ended lower Thursday, with the S&P 500 extending its September decline to 2.57%, following a mixed set of data releases that cast confusion over the state of the labor market. A muted August reading of the ISM's benchmark survey of activity in the services sector, the key driver of U.S. growth, also sowed concern that growth is sputtering under the weight of high Fed interest rates in a late-cycle economy. That puts today's August employment report in sharp focus for Wall Street. Investors are looking to establish the size of the Fed's next rate cut, which would be the first in more than a year, and the pace and scope of further cuts heading into the final two meetings of the year.At present, CME Group's FedWatch suggests a 41% chance of a half-point reduction on Sept. 18, but those odds could change quickly if today's payroll report were to show any deviation from Wall Street's current forecast.
Fed Chairman Jerome Powell is likely to use today's August jobs report to define the central bank's autumn rate path. Olivier Douliery/Bloomberg via Getty Images
Analysts expect that employers added 164,000 new jobs to the economy last month, up from the July tally of 114,000, with the headline unemployment rate easing to 4.2%."The labor market continues to show signs of softening overall, but remains unlikely to fall apart completely," said Selma Hepp, chief economist at CoreLogic. "The real question remains whether or not the Federal Reserve waited too long to begin to reduce rates in the effort to avoid recession and if a soft landing is indeed achievable."Bond markets have been expressing that very concern for much of the week, with rate-sensitive 2-year note yields falling to 3.717%, down more than 20 basis points on the month. At the same time, growth-focused 10-year notes are down 23 basis points at 3.699% as investors move cash into safe-haven assets. Related: Jobs report to signal timing and size of autumn Fed interest rate cutsHeading into the start of the trading day on Wall Street, with the jobs data due at 8:30 a.m. U.S. Eastern Time, futures tied to the S&P 500 suggest a 37 point pullback at the opening bell.The Dow Jones Industrial Average, meanwhile, is called 140 points lower while the tech-focused Nasdaq is set for a 2325 point decline amid another pullback in heavyweight chip stocks tied to new export controls floated by the Biden Administration. More Wall Street Analysts:Analysts reboot Grand Theft Auto maker's stock price targetAmerican Express stock analyst flags concerning shift in consumer behaviorAnalyst resets Nvidia stock price target before earningsIn Europe, the regional Stoxx 600 benchmark fell 0.43% in early Frankfurt trading following a downward revision for second quarter eurozone GDP, while Britain's FTSE 100 slipped 0.37%.Overnight in Asia, the Nikkei 225 fell 0.72% in Tokyo in a follow-on move to last night's Wall Street decline, while the regionwide MSCI ex-Japan benchmark edged 0.22% higher into the close of trading.Related: Veteran fund manager sees world of pain coming for stocks
