© Reuters. FILE PHOTO: People pass an electronic screen displaying Japan’s Nikkei stock price index in a commercial building in Tokyo, Japan Sept. 22, 2022. REUTERS/Kim Kyung-Hoon
By Pete Schroeder
WASHINGTON (Reuters) – US stocks fell as dollar and government bond yields rose on Thursday as Federal Reserve officials showed little sign of pulling back from rate hikes ahead of Friday’s monthly US jobs report.
US stocks faltered during the trading day but ended lower after multiple Fed officials continued to emphasize that interest rates would continue to rise until inflation was under control.
The price closed 1.15% lower, the price 1.02% and the price fell 0.68%.
The MSCI World Equity Index, which tracks stocks in 45 countries, fell 0.85%.
Investors will look to Friday’s Labor Department report for some clarity on whether a steady diet of rate hikes is starting to take a bite out of the economy and high inflation. This week’s economic data has produced conflicting views, with some signs of a decline in labor demand, while other reports indicated that hiring was as robust as ever.
For their part, the comments from Fed officials have undermined any fledgling hopes that the central bank is preparing to move away from the ongoing rate hikes.
A trio of officials struck a similar note on Thursday, with Fed Governor Lisa Cook, Chicago Fed President Charels Evans, and Minneapolis Fed President Neel Kashkari all stressing that the inflation war was underway and that they were unwilling to veer off course. change.
Against equities, dollar and US Treasury bond yields both rose on the day.
The , which tracks the greenback against a basket of six currencies, rose 1,103 points or 0.99% to 112,177. The benchmark on ten-year government bonds grew by 6.3 basis points to 3.812%.
“The rise in US interest rates is weighing on equities and is also pushing the US dollar up,” said David Madden, market analyst at Equiti Capital. “Over the past few weeks, the greenback has been a popular safe haven, and given the stock’s decline, it’s going up in that regard as well.”
Markets were also volatile ahead of Friday’s jobs report as investors weighed competing narratives from other data.
On Thursday, the U.S. Department of Labor reported first unemployment benefits claims came in at 219,000 for the week ended Oct. 1, surpassing economists’ expectations of 203,000.
“The job market is still solid, but softening,” said Bill Adams, chief economist at Comerica (NYSE:) Bank. “As the unemployment rate gets higher, wage growth is likely to slow, taming some of the inflationary pressures in the US economy.”
The near-term outlook is further complicated by next week’s data on US consumer inflation, which is expected to slow for a third month in September to 8.1%, still the highest since the mid-1980s.
Plans by the Organization of the Petroleum Exporting Countries and its partners, including Russia, to sharply cut oil production continued to push oil prices up, as prices rose for the fourth day in a row.
futures were up 1.1% at $94.42 a barrel and closed 0.8% higher at $88.45 a barrel.