Wall Street is sinking sharply as it focuses on the downside of a surprisingly strong job market.
The S&P 500 was 1.1 per cent lower in afternoon trading and nearly back to where it was in May. The Dow Jones was down 1 per cent and the Nasdaq composite was 1.4 per cent lower. The Australian sharemarket is set to fall with futures at 4.56am AEDT pointing to a drop of 39 points, or 0.6 per cent, at the open. The ASXStocks fell as the pressure on them cranked even higher from rising Treasury yields in the bond market.
Fed Governor Michelle Bowman said in a speech on Monday that she expects it will likely be appropriate “to raise rates further and hold them at a restrictive level for some time.” Restrictive is what Fed officials call high-enough rates to slow the overall economy.Tuesday’s report on the US job market could give the Fed more reason to keep rates high. It showed employers were advertising 9.6 million job openings at the end of August, much higher than the 8.9 million that economists expected.
Big Tech stocks were some of the heaviest weights on the market. They and other high-growth stocks are seen as some of the biggest victims of high interest rates. Amazon fell 3.1 per cent, Microsoft dropped 2.5 per cent and Nvidia lost 1.8 per cent. However, China Evergrande jumped 28 per cent after resuming trading Tuesday. Its shares were suspended last week as the troubled real estate developer announced that its chairman was under investigation.
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