US stocks fall as private payroll data suggests more Fed rate hikes are coming
- US stocks slipped on Thursday as traders ramped up expectations for another Fed rate hike.
- Private payrolls rose 497k last month, more than double the consensus estimate of 220k.
US stocks dropped on Thursday as traders ramped up expectations for another interest rate hike after strong private jobs data that suggests more central bank tightening could be in order.
Private payrolls jumped to 497,000 in June, per ADP data, more than double economists' estimate of 220,000 private payrolls for the month. The figure is also nearly double the revised 267,000 payrolls recorded in May, marking the largest jump in private payrolls since July of last year.
The data reflects a hot jobs market, which Fed officials have cited as a reason why interest rates could stay elevated.
Traders upped their bets on the Fed raising interest rates at its policy meeting this month. Investors see a 95% chance the central bank will raise rates another 25 basis-points at its upcoming eeting, according to the CME FedWatch tool, a move that would lift the Fed funds rate target to 5.25-5.5%.
Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Thursday:
- S&P 500: 4,402.97, down 1%
- Dow Jones Industrial Average: 33,944.15, down 1% (344.49 points)
- Nasdaq Composite: 13,631.72, down 1.17%
Here's what else is going on today:
- China is scrambling to show it can prop up its yuan as the currency plunges to a 14-year low.
- The Fed's own economists are unsure if the US will tip into recession.
- JPMorgan chief Jamie Dimon not running for president would be a "huge loss," Bill Ackman says.
- Crypto is "digitizing gold," and bitcoin has the power to "revolutionize" finance, BlackRock said.
In commodities, bonds, and crypto:
- Oil prices slipped. West Texas Intermediate crude was down 0.21% to $71.62 a barrel. Brent, the international benchmark, slipped 0.3% to $76.42 a barrel.
- Gold ticked lower 0.35% to $1,910.98 per ounce.
- The 10-year Treasury yield rose eight basis points to 4.045%.
- Bitcoin rose 1.21% to $30,608.34.