The Dow Jones Industrial Average dropped 0.5% by midday Friday after a stronger-than-expected August jobs report pushed up the odds of a September Fed rate hike. Traders now face another inflation print on Sept. 11, just days before the Federal Reserve's Sept. 15 meeting.
The Dow Jones Industrial Average fell 0.5% heading into midday trading Friday, pulled down by a jobs report that came in far hotter than forecasters expected. The S&P 500 slipped 0.3% and the Nasdaq composite eased 0.3% as well, while the small-cap Russell 2000 bucked the trend, edging 0.2% higher. The market is closed Monday for Labor Day.
Jobs surprise lifts rate-hike odds
The Labor Department said nonfarm payrolls jumped by 162,000 in August, well above the 53,000 economists had forecast, while the unemployment rate held steady at 4.1%. The stronger print pushed odds of a Fed rate hike in September up to 60% from 49% as of Thursday, according to CME Group.
Inflation report looms before the Fed meets
Investors now turn to the consumer price index data due Sept. 11, just ahead of the Federal Reserve's Sept. 15 meeting. Economists expect headline prices to have risen 0.1% from July and 3.4% annually, with core inflation prices, which strip out food and energy, seen rising 0.2% for the month and 2.5% for the year.
Elsewhere, West Texas Intermediate crude fell to around $90.55 a barrel, the 10-year Treasury yield edged higher to 4.77%, and bitcoin dropped to roughly $79,500.
Dow movers split on earnings and premarket action
Inside the Dow industrials, Caterpillar and Nvidia each climbed nearly 1% in premarket trading, with Nvidia moving further above a cup-with-handle entry point. Chevron slipped, however, dropping 0.7% in early trading, ahead of the Federal Reserve's rate hike decision on Sept. 15.
Source: Investor's Business Daily
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