The New York Stock Exchange opened lower, on profit taking after four sessions of increases and following a US employment report much more positive than expected.
Around 2:00 p.m. GMT, after the announcement by the US Department of Labor of the creation of 372,000 jobs in June, more than expected, the Dow Jones index fell by 0.46%, the Nasdaq by 1.12% and the S&P 500 by 0.76%.
The day before, the Dow Jones had concluded up 1.12% to 31,384.55 points. The Nasdaq, with strong technological coloring, had climbed 2.28% to 11,621.35 points and the S&P 500 advanced by 1.50% to 3,902.62 points, signing their fourth session in a row in the green.
The job market in the United States came as a surprise on Friday with job gains well above the 250,000 expected in June.
The unemployment rate remained stable at 3.6% for the fourth month in a row.
The market was reacting negatively, analysts said, more because it was an opportunity to take profits after a strong start to July than because of fears of an overheated economy that could encourage the Fed to tighten rates further .
“We’ve had a strong rebound for four or five days, so that’s an excuse to take some money off the table,” summed up Peter Cardillo of Spartan Capital.
Same analysis for Art Hogan of B. Riley Wealth Management, who saw investors “grab this excuse” to make profits and who judged Wall Street’s reaction “impulsive”.
But basically, this strong report on employment “is good news for everyone”, underlined Mr. Cardillo.
“If we look at the trend, over three months, we have gone from 383,000 monthly job creations to 372,000, so it is slowing down without falling off the cliff”, welcomed Mr. Hogan for his part.
The strategist especially pointed out that the hourly wage has stopped climbing. “The pressure on wages has stabilized and this is very important. This shows that inflation is stable” on this side, explained the expert from B. Riley Wealth Management.
That jobs data did little to change the Fed’s scenario for its expected July 27 interest rate hike to 97% by 0.75 percentage points.
However, for the September meeting, the markets were calculating, according to futures, a better chance (at 72% compared to 64% before the release of the employment figures) for another rate hike of three quarters points. percentage.
“But a lot of water will flow under the bridges by September,” tempered Mr. Hogan. As for Mr. Cardillo, he believed in a pause or even a modest rate hike from the Fed in September.
“The economy remains strong,” said Atlanta Fed President Raphael Bostic. These figures “suggest signs of a slowdown”, he also estimated. Still in favor of a 75 basis point rate hike, he said the Fed “will try to bring inflation down while keeping the economy as strong as possible.”
Nine of the eleven S&P sectors were in the red starting with materials (-1.28%), communication services very present on the Nasdaq (-1.10%), but also energy (-1.07 %).