(Bloomberg) — US stock futures pushed lower and Treasury yields spiked higher after two separate sets of data showed the American labor market remains strong.
Most Read from Bloomberg
If You Have Student Loans, Mark These Dates on Your Calendar
Why Conservatives Are Blocking McCarthy as Speaker — and Throwing Congress Into Chaos
Amazon to Slash More Than 18,000 Jobs in Escalation of Cuts
Fed Affirms Inflation Resolve, Pushes Back Against Rate-Cut Bets
Shopify Tells Employees to Just Say No to Meetings
Contracts on the S&P 500 and the Nasdaq 100 slumped after US firms added more jobs than forecast in December, according to data from ADP Research Institute in collaboration with Stanford Digital Economy Lab. Stock futures fell further after initial jobless claims for the week ending Dec. 31 came in lower than estimates.
Treasuries extended their slide, with the 10-year yield around 3.75%. The dollar gained.
Investors are now awaiting nonfarm payrolls on Friday for further clues on the labor market and its implications for monetary policy, after Fed minutes showed officials cautioned against underestimating their will to keep interest rates high for some time. Traders are still pricing in rate cuts by end-2023.
“Pricing in the market still shows that investors continue to bet that the Fed will start cutting rates before the end of this year,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “Yes, there are some data pointing at slowing economic activity in the US, but the jobs market – which is closely watched by the Fed – remains surprisingly tight.”
Elsewhere, crude oil clawed back some losses after falling 9.5% in the past two days, with traders assessing the outlook for China’s demand and the impact of cold US weather on inventories.
Read More: Fed Affirms Inflation Resolve, Pushes Back Against Rate-Cut Bets
Key events this week:
Eurozone retail sales, CPI, consumer confidence, Friday
Germany factory orders, Friday
US nonfarm payrolls, factory orders, durable goods, Friday
Some of the main moves in markets:
S&P 500 futures fell 0.5% as of 8:34 a.m. New York time
Nasdaq 100 futures fell 0.5%
Futures on the Dow Jones Industrial Average fell 0.3%
The Stoxx Europe 600 fell 0.1%
The Bloomberg Dollar Spot Index rose 0.3%
The euro fell 0.3% to $1.0569
The British pound fell 0.9% to $1.1941
The Japanese yen fell 0.8% to 133.65 per dollar
Bitcoin was little changed at $16,805.45
Ether was little changed at $1,251.44
The yield on 10-year Treasuries advanced six basis points to 3.75%
Germany’s 10-year yield advanced six basis points to 2.33%
Britain’s 10-year yield advanced four basis points to 3.53%
West Texas Intermediate crude rose 2.1% to $74.37 a barrel
Gold futures fell 0.4% to $1,851 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sagarika Jaisinghani.
Most Read from Bloomberg Businessweek
How McDonald’s Won Russia—and Then Lost It All
There Has Never Been a Better Time for Billionaire Schadenfreude
The Secret to Ron DeSantis’s Success? Ignore Donald Trump—and Attack Business Instead
New York Landlords Try Carbon-Sucking Towers to Comply With Climate Law
China’s Tech Giants Brace for a New Era of Slower Growth
©2023 Bloomberg L.P.