Traders work on the floor of the New York Stock Exchange during the afternoon of March 27, 2024.
Michael M. Santiago | Getty Images
Stocks fell on Thursday amid a bout of choppy trading ahead of the March jobs report. Rising oil prices and fears that the Federal Reserve may cut interest rates also affected investor sentiment.
the Dow Jones Industrial Average The stock lost 530.16 points, or 1.35%, to close at 38,596.98 points. The 30-stock Dow Jones index suffered its worst session since March 2023, and recorded its fourth consecutive losing day. the Standard & Poor's 500 It decreased by 1.23% to close at 5147.21 points. the The technology-heavy Nasdaq Composite It decreased by 1.40% to close at 16,049.08 points.
The three major averages saw sharp declines late in the session, falling more than 2% from their intraday highs. Between the highs and lows of the day, the Dow Jones swung more than 860 points.
The price of crude oil jumped at midday, which coincided with the stock change on Thursday. The price of West Texas Intermediate crude surpassed $86 a barrel to reach its highest level since October, raising concerns about energy prices that are helping to accelerate inflation.
Minneapolis Fed President Neel Kashkari also commented Thursday afternoon, saying he questions whether the central bank should cut interest rates at all if inflation remains flat, adding to a recent chorus of Fed spokespeople speaking conservatively. About politics. the 10-year Treasury bond yield It rose from the session's lowest levels following Kashkari's statements. The last trading rate was 4.305%. Treasury yields briefly touched 4.429% on Wednesday, a new high for the year.
“Investors are currently taking a wait-and-see attitude,” said Sam Stovall, chief investment strategist at CFRA Research. “The 10-year bond yield is the main driving force due to the Fed's concern implying that they are in no hurry to cut interest rates, thus confirming the adage that the Fed will be slower to cut interest rates.”
Stovall added that the market remains expensive, given that the S&P 500 is trading at a 33% premium above its long-term average.
“I find that a little disturbing,” he said. “I think it's only a matter of time before we end up absorbing some of these gains.”
Dow Jones Index for one day
So far this week, the S&P 500 is down 2%, with three out of four days in the red. The 30-stock Dow Jones index has lost nearly 3% for the week so far, while the Nasdaq is down 2% through Thursday's close.
Federal Reserve Chairman Jerome Powell stressed on Wednesday that although there is still room to cut interest rates this year, policymakers will need more evidence that inflation is moving toward the central bank's 2% guidance level before interest rates can fall.
The March nonfarm payrolls report is scheduled for release on Friday. The consensus forecast is for an increase of 200,000 jobs with an unemployment rate of 3.8%. In February, US job growth totaled 275,000 jobs while the unemployment rate rose to 3.9%. A very hot jobs report could boost yields and keep pressure on the Fed to keep interest rates high.
