US Markets Retreat as Labor Data Complicates Fed Policy Outlook
New York – US stock markets experienced a significant downturn Thursday, tempering the initial enthusiasm fueled by Nvidia’s earnings report. The Dow Jones Industrial Average closed at 45,752 points, reflecting a 0.8% decline from the previous day’s close. The S&P 500 fell further, reaching approximately 6,539 points – a 1.6% drop – while the Nasdaq 100 saw a steeper contraction, closing around 24,054 points, down 2.4%.
Early trading saw a renewed sense of optimism surrounding artificial intelligence, driven by Nvidia’s quarterly results. However, this sentiment quickly dissipated as the US Department of Labor released its latest employment data. While the unemployment rate edged up to 4.4% in September, the creation of 119,000 non-farm jobs significantly exceeded expectations.
This nuanced report presents a complex challenge for the Federal Reserve. The central bank is tasked with the dual mandate of price stability and maximizing employment, a delicate balancing act currently exacerbated by persistent inflationary pressures. The robust job creation now casts doubt on the widely anticipated interest rate cuts investors had hoped for in December, potentially forcing the Fed to maintain its restrictive monetary policy for longer. Analysts suggest the stronger-than-expected employment figures will fuel debate within the Federal Open Market Committee regarding the appropriate course of action, potentially favoring a more hawkish stance.
The euro weakened slightly against the dollar, trading at $1.1529, equivalent to €0.8674 per dollar. Gold prices remained largely unchanged at $4,077 per fine ounce, or €113.70 per gram. Crude oil prices also declined, with a barrel of Brent crude trading at $63.08, a decrease of 43 cents or 0.7% from the previous day’s close. This price movement underscores broader concerns about the impact of potential interest rate hikes on global economic growth and energy demand.
