Stocks Driven Lower After Fed Updates – Nasdaq Down 1.4%
Stocks reversed strong intraday gains on Fed speak and as oil rallied amid heightened geopolitical concerns, weighing on market sentiment ahead of US non-farm payroll data today. The Dow Jones Index lost 1.36% after having been up as much as +0.8%. The S&P 500 Index was down 01.23% after topping out at +0.9% intraday, and the tech-heavy Nasdaq, which drove morning gains, went from +1.2% to finish 1.4% lower. Oil prices pushed higher as tensions between Israel and Iran ratcheted up, with benchmark Brent topping $90 per barrel for the first time since last October. WTI gained 1.3% to trade up to $86.56 a barrel, and Brent closed up 1.7% at $90.88 a barrel. Commodity currencies outperformed amid higher industrial metal prices but later pared advances as stocks turned lower. Gold pulled back from a fresh record high ($2305.64), snapping a seven-day rally.
Fed Members Add Volatility to the Market
A swathe of Fed speak muddied investor clarity over the central bank’s outlook, only a day after relatively dovish comments from Jay Powell provided the initial spark for equity gains. US stock markets closed much lower as FOMC members gave conflicting updates on where they see US rates moving this year. Neel Kashkari warned it’s possible the central bank won’t cut rates at all this year if inflation stalls, while other policymakers reinforced Jerome Powell’s patient approach; Patrick Harker said inflation is “still too high,” and Thomas Barkin emphasized there’s time to get more clarity from the data. These comments all give further credence to today’s blue riband non-Farm payrolls data, with traders braced for further volatility into the weekend.
Non-Farms in Focus for Traders Today
Traders are preparing for another interesting day in markets today, with the event calendar pointing to a calm before the storm of US employment numbers. There is little in the way of tier 1 data due out in Asia today, but the London open will see a focus on the UK with the latest construction PMI numbers due out. But it will be all eyes on the New York session again with the non-farm’s numbers due out alongside Canadian employment data early in the day. The headline NFP numbers are seen increasing by at least 200,000 for a fourth straight month. Average hourly earnings are projected to climb 4.1% from the same month last year, the smallest annual advance since mid-2021, and any prints significantly off these expectations should see more moves in already sensitive markets.
