NEW YORK: US stocks recovered lost ground to close down just slightly on Thursday, while the stocks in Europe finished lower, ahead of important US jobs data.
The Dow Jones Industrial Average closed flat, while the S&P 500 and Nasdaq index ticked lower.
Experts say signs of a robust US economy, such as strong labor market data this week, are in fact bad news for equities as it provides the Federal Reserve more reason to keep monetary policy tight through the end of the year 2023 and beyond, according to AFP.
The prospect has weighed heavily on American Treasury yields, which reached their highest levels since 2007 this week as investors fear that high borrowing costs for consumers and businesses will eventually drag on the economy.
Those increasing bond yields are responsible for pushing up the weekly average rate on the popular thirty-year mortgage to a new twenty three-year high, Freddie Mac said on Thursday.
All eyes are on Friday’s monthly American employment data, which will give investors a good hint if recent signs of a softening in the labor market is possibly to continue.
Peter Cardillo from Spartan Capital said that if there are any signs of the labour market cracking then that would clearly be positive and maybe could send stocks a little bit higher.
AJ Bell investment director Russ Mould said that the markets sell-off which witnessed government bond rates fall and yields rise has taken centre stage this week, and investors continue to watch the ten-year Treasury yield like a hawk.
Oil prices went down further from recent highs after a US report on gasoline inventories came in much higher than observers expected, an indication of decreasing demand in the world’s largest economy.
Other Stocks
The main indices in Europe had spent most of the session in positive territory on the back of Wall Street’s resurge on Wednesday, before being dragged down as American markets fell earlier in the day.
Asian indices also ended higher, with Tokyo jumping 1.8% by the close. Markets in mainland China were closed for a weeklong holiday.
