ASX set to open lower as jobs data sinks Wall Street

The report did contain some signals analysts said could ultimately get the Fed to be less aggressive, and the mixed data could lead markets to swing through Friday. Big daily reversals have become the norm recently as Wall Street struggles to handicap how aggressive the Fed will be.

Average wages for workers were a touch weaker in May than economists expected. While that’s discouraging for people watching prices at the grocery store and gasoline pump jump more than their paychecks, it could mean less future pressure on inflation across the economy. Plus, the nation’s job growth decelerated last month, even if it was better than expectations.

“The employment situation remains solid for the economy, but there are some signs of slowing,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “The signs aren’t clear and convincing enough to suggest the Fed needs to pause yet, but a lot can change over the next few months.”

More than four out of five stocks in the S&P 500 fell amid the worries about rising rates, with the heaviest losses hitting technology stocks and other big winners of the prior low-rate world.

Tesla tumbled 9.2 per cent after US safety regulators said more than 750 owners have complained about cars suddenly stopping on roadways for no apparent reason while operating on their partially automated driving systems. A report also said Tesla is considering layoffs amid concerns by its CEO, Elon Musk, about the economy. Because Tesla is the fifth-biggest company in the S&P 500, its movements carry a heavier weight on the index.

Companies from Walmart to Delta Air Lines have recently warned how inflation is eating into their profits, which has upped the pressure on markets because stock prices tend to track profits over the long term. The warnings are layering on top of the market’s worries about Russia’s invasion of Ukraine and about business-slowing, anti-COVID measures in China.

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“There are just so many uncertainties,” said John Lynch, chief investment officer for Comerica Wealth Management. “You can’t put Ukraine on a spreadsheet and you can’t put lockdowns in China on a spreadsheet.”

JPMorgan Chase’s CEO, Jamie Dimon, said earlier this week that he’s preparing his company for a possible economic “hurricane,” highlighting less economic support from the US government and Federal Reserve, as well as the war in Ukraine.

AP