New York: Stocks in the U.S. Fell in premarket trading after a hotter-than-expected report on hiring suggested the Federal Reserve will have to stay aggressive in its efforts to fight inflation.
Futures on the S&P 500 fell 1% after being slightly higher just before the Labor Department released its latest employment figures, which showed a gain of 528,000 jobs, compared with an expectation for a gain of 250,000 jobs.
The Dow Jones Industrial Average fell 0.7% and the Nasdaq dropped 1.3%. Bond yields jumped, with the yield on the 2-year Treasury rising to 3.2%. The 10-year treasury yield rose to 2.81%. Yields had been pulling back in expectations the Fed could ease up somewhat on the pace of rate hikes as the U.S. Economy slowed, giving a boost to the stock market.
Markets in London, Paris and Frankfurt were lower while Shanghai and Tokyo advanced. Oil prices fell back.
The Fed has raised its benchmark rate twice by 0.75 percentage points this year, three times its usual margin and the biggest hikes since the early 1990s.
Investors worry rate hikes by the Fed and other central banks in Europe and Asia to tame inflation that is running at multi-decade highs might derail economic growth.
Fed officials have tried to calm fears the United States might tip into a recession by pointing to a strong job market as evidence the economy can tolerate higher borrowing costs.
In Asia, the Shanghai Composite Index advanced 1.2% to 3,227.03 and the Hang Seng in Hong Kong gained 0.1% to 20,201.94.
The Nikkei 225 in Tokyo gained 0.9% to 28,175.897 after June labor cash earnings rose 2.2% over a year ago, though forecasters warned that strength was unlikely to last. Much of the increase was due to half-yearly bonuses that are paid in June.
The Kospi in Seoul added 0.7% to 2,490.80 and Sydney’s S&P ASX 200 advanced 0.6% to 7,015.60.
India’s Sensex rose 0.1% to 58,381.11 after the Reserve Bank of India raised its benchmark interest rate by a half percentage point to 5.4%. Central bank Gov. Shaktikanta Das forecast 7.2% economic growth in the year through March and inflation of 6.7%.
New Zealand and Bangkok declined while Singapore rose.
Jakarta advanced 0.4% after Indonesia’s economy grew by a stronger-than-expected 5.4% over a year earlier in the latest quarter.