- US stocks fell on Thursday as investors pondered the impact of a strong jobs report on Fed policy and inflation.
- Businesses created 978,000 jobs through May, exceeding the estimate of 650,000. Unemployment claims fell below 400,000.
- AMC shares fell after the movie chain announced plans to sell around 11.6 million shares.
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All major U.S. indices opened lower on Thursday as investors reflected on the impact of unemployment data on Federal Reserve policy and the outlook for inflation.
ADP’s monthly payroll report showed companies adding 978,000 jobs until May, handily exceeding the median estimate of 650,000 payrolls. Separately, weekly jobless claims fell below 400.000 for the first time since the pandemic hit the United States in March 2020.
Taken together, the ADP and claims data suggest Friday’s jobs report may show a sharp rebound in hires after the disappointing April reading. May data on non-farm payrolls in the United States will be released on Friday.
Here’s where the U.S. indices were at 9:30 a.m. ET on Thursday:
Although monetary policy remains accommodative for now, the tapering poses a risk to the stock market recovery as it could erode confidence in the Fed’s transient inflation outlook and push up interest rates, said Craig Johnson of Piper Sandler.
The chief market technician expects consolidation in the near term, but reiterated his price target of 4,625 for 2021 for the S&P 500, saying “the path of least resistance remains higher in the long term.”
Philadelphia Fed Chairman Patrick Harker is the latest central bank official to flirt with the idea of discussing a reduction in asset purchases. On Wednesday, Harker said the Fed is expected to start discussing the timing for reducing its bond buying program.
AMC fell after the memes-turned movie chain announced plans to sell up to 11.6 million shares. Other favorite social media stocks like GameStop and Bed Bath and Beyond slipped into the early morning discussions after staging dizzying rallies earlier in the week.
Oil plunged Thursday after closing at post-pandemic highs on Wednesday. West Texas Intermediate crude fell 0.06% to $ 68.54 a barrel. Brent crude, the international benchmark for oil, rose 0.89% to $ 71.99 per barrel, to intraday highs.
The 10-year US Treasury yield was 1.599% for the last time, while the dollar index rose 0.2%, its biggest daily gain in a week.
As the US dollar gained strength, the rally in gold slowed.
Gold futures fell 1.46% for the last time to $ 1,880.50 an ounce. The price of gold has risen by around 13% in the past three months and hit its highest level this week since the start of the year.