US stocks fell after the latest labor market data showed that hiring continued at a steady pace last month, raising expectations of an aggressive tightening of monetary policy by the Federal Reserve.
The S&P 500 blue chip index fell 1.7 percent and the Nasdaq Composite technology index fell 2.7 percent.
A report by the Ministry of Labor shows that the world’s largest economy added 390,000 jobs last month, just under 436,000 in April. However, the figures for May still exceed expectations of 325,000.
Investors are closely monitoring the state of the labor market as they assess how quickly they expect the Fed to raise interest rates. Politicians have already raised the central bank’s key interest rate by 0.75 percentage points this year and are expected to continue to tighten monetary policy aggressively as they try to cut inflation. As the Fed seeks to promote maximum employment, an overheated job market could increase inflationary pressures.
Peter Bukvar, chief investment officer at Bleakley Advisory Group, said that while the figures were not a “blowout”, they did boost expectations of a “Fed aggressive response”.
US government debt has come under some pressure to sell since the Jobs report, with the yield on monetary-sensitive two-year government government bonds rising 0.05 percentage points to 2.68%. The 10-year yield, which closely follows the long-term economic outlook, rose 0.05 percentage points to 2.96%.
Both reference bonds have jumped since the beginning of the year, but withdrew from their last peaks.
Shares of Tesla fell about 5% in the open after Reuters reported that Elon Musk had told employees he had a “super bad feeling” about the economy and that the carmaker could have to cut about 10% of its workforce. your strength.
Meanwhile, the regional gauge Stoxx Europe 600 gave up earlier gains, falling lower for the day after closing the previous session 0.6% higher. The German Dax also fell after the US open. Markets in the United Kingdom were closed for public holidays, as were markets in Hong Kong and mainland China.
European stocks began to decline after retail sales in the euro area fell 1.3% in April from a month earlier, the first monthly drop since the beginning of the year. On an annual basis, sales increased by 3.9%. Economists polled by Reuters expected a 0.3% monthly increase and a 5.4% annual increase.
Analysts at ING said weak consumer confidence and high inflation weighed heavily on the region’s economy. “While this decline may overestimate the development of total consumption, it provides further evidence of a serious slowdown in the euro area,” they wrote.
Retail sales figures were followed by stronger-than-expected economic data from Germany, with the country’s exports rising 4.4% between March and April.
Brent oil rose close to $ 118 a barrel. OPEC and its allies reached an agreement Thursday to speed up oil production in July and August. The dollar index, which measures the US currency against a basket of six others, rose 0.2 percent.
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