Live updates: Stocks sink after hotter-than-expected jobs report | CNN Business (2024)

US stocks plummeted Friday as investors worried that the stronger than anticipated jobs numbers will lead the Federal Reserve to continue raising interest rates aggressively in November and December in order to squash persistent inflation.

Despite Friday’s big losses, stocks still finished the week with gains, thanks to huge market rallies Monday and Tuesday. But the Dow is now back in bear market territory, more than 20% below its all-time high.

The Dow sank about 630 points, or 2.1%.

The S&P 500 fell 2.8%.

The Nasdaq Composite plunged 3.8%.

President Biden’s announcement Thursday of a federal pardon for simple marijuana possession lit up (sorry not sorry) shares of several cannabis stocks and ETFs — but the contact high was short-lived.

Canopy Growth (CGC), Cronos (CRON) and the AdvisorShares Pure US Cannabis ETF (MSOS) all enjoyed stock bumps at first.

But reality seemed to set in on Friday, as investors realized that a pardon isn’t the same thing as decriminalization. The major cannabis stocks and ETFs all plunged Friday. While more states have legalized recreational and/or medical marijuana, federal laws still prohibit the use, sale and possession of pot.

Until that changes, cannabis stocks may have limited upside. It didn’t help that one pot stock, Tilray (TLRY), reported a loss Friday and sales that missed forecasts. Tilray plunged 16%, following a 30% Biden-supplied boost Thursday.

TGIF? Not this F. Stocks continued their swoon late Friday afternoon, with the Dow plunging more than 650 points, or 2.2%. All 30 Dow stocks were in the red.

The S&P 500 was down 2.8%. Tech stocks really took it on the chin, with the Nasdaq Composite plunging nearly 4%. The three indexes are all still up about 1% to 2% this week, however, thanks to big rallies Monday and Tuesday.

Remember those ginormous market rallies from Monday and Tuesday? Ancient history.

Stocks are still up about 2% for the week thanks to those big rallies, but the major indexes took a big tumble Friday after the jobs report reignited worries about more big interest rate hikes from the Federal Reserve. The CNN Business Fear & Greed Index is once again showing signs of Extreme Fear as well.

Concerns about Corporate America’s profits didn’t help matters.

Chip giant AMD (AMD) plunged more than 10% after warning that sales would take a hit due to slowing demand for personal computers. And denim wasn’t in fashion on Wall Street Friday. Levi Strauss (LEVI) tumbled 9% after the company said a strong dollar was eating into sales.

The Dow was down nearly 450 points, or 1.5% in midday trading.

The S&P 500 fell 2%.

The Nasdaq Composite dipped nearly 3%.

A woman shops for groceries in Washington, D.C., on August 19.

Americans are still getting a decent sized bump in their weekly paychecks. Wages rose 5% in September over the past year, according to Friday’s jobs report. The problem is that the pace of inflation is still higher than that. In other words, shopping for stuff like groceries and paying monthly rent takes a huge bite out of that higher compensation.

The Federal Reserve wants to see wage growth slow. If that happens, the hope is that companies will be less likely to keep raising consumer prices at a breakneck pace.

For one, these businesses won’t have as much pressure on their bottom line from paying higher salaries. And companies also will have to realize that if their customer has less in their pocket, price increases may backfire and lead to lower demand.

Consumer prices surged 8.3% year-over-year in August. The government will report CPI numbers for September next week. Economists are expecting a slight slowdown, to 8.1%. The Fed (and American shoppers) would love to see that number fall even further. The sooner the better.

US stocks opened lower on Friday as investors digested a September jobs report that came in hotter than expected.

The U.S. economy added 263,000 jobs in September, higher than analyst estimates of 250,000. The unemployment rate came in at 3.5%, down from 3.7% in August.

Strong employment data indicates that the Federal Reserve will continue with its aggressive interest rate hikes to cool the economy and fight persistently high inflation, causing economic pain.

The Dow fell by 320 points, or 1.1%, on Friday morning.

The S&P 500 was down 1.5%.

The Nasdaq Composite was 2% lower.

The Marriner S. Eccles Federal Reserve Board Building is seen on September 19 in Washington, DC.

The September jobs numbers were probably strong enough to keep the Federal Reserve on track to (chant like a high school cheerleader) be aggressive, be be aggressive with regards to rate hikes.

According to fed funds futures on the CME, investors are now pricing in a more than an 80% chance of a fourth straight three-quarters of a percentage point hike at the Fed’s November 2 meeting. That’s up from about a 57% probability of another 75 basis point hike a week ago and just a little more than 1% chance a month ago.

What’s more, traders are now betting that there’s about a 15% probability of yet another three-quarter point rate increase at the Fed’s December 14 meeting. The market was pricing in zero chance of that happening only a week ago.

It’s no wonder then that stocks are sliding Friday following the jobs report.

Investors were less than pleased after September’s job totals came in a bit stronger than expected. With 263,000 jobs added to the US economy last month, the Fed’s rate hikes may not be having the slowdown effect policymakers had hoped for.

The Fed was hoping that a long series of historic rate hikes would slow down the economy and bring inflation lower. But the job market remains stubbornly robust, which means the Fed has more room to keep hiking rates.

Rate hikes eat into corporate profits, which has sent stocks sinking sharply in 2022.

Dow futures fell 140 points or 0.5%.

S&P 500 futures were down 0.8%.

Nasdaq futures were 1.3% lower.

The fever hasn’t broken yet for America’s employmentmarket.

Theeconomyadded 263,000jobsin September, the Bureau of Labor Statistics reported Friday. That’s slightly higher than economists’ estimates of 250,000, according to Refinitiv.

While still a robust headline number, it is the second consecutive month of falling totals, pointing to a labor market slowdown.

The unemployment rate fell back to 3.5% from 3.7%.

Ahead of another consequential jobs report, stock futures remained relatively unchanged.

Investors are likely hoping for a subdued jobs report. That could mean that the Fed has less room to keep hiking rates by historic levels in its fight against inflation.

Dow futures were up 25 points, or 0.1%.

S&P 500 futures fell 0.1%.

Nasdaq futures fell 0.4%.

US oil rose 0.9% to $89 a barrel. Average US gas prices rose to $3.89 a gallon.

When the Bureau of Labor Statistics releases its latest monthly jobs report at 8:30 am ET, all eyes will be on whether the labor market is showing signs of loosening up – one of many crucial factors that will help the Federal Reserve determine its next steps in its fight against decades-high inflation.

The US economy is forecast to have added 250,000 jobs in September, which would be the lowest monthly jobs gain since December 2020. The unemployment rate is expected to hold steady at 3.7%, according to Refinitiv estimates.

August jobs data already indicated that the historically tight labor market has loosened by a notch. The jobs report for that month found that Americaadded 315,000 positions, a much lower level than the 512,000 average job gains over the past 12 months. The number of open positions also fell,sinking by 1.1 million, the largest monthly decline outside of the pandemic, according to the Jobs Openings and Labor Turnover Survey released on Tuesday.

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If Friday’s headline number comes inabove250K, Wall Street may read that as a sign the Fed is going to have to keep raising interest rates, adding to already-significant strain across financial markets.

If it comes in wellbelow250K, you might see some renewed optimism that the Fed’s policies are starting to have their intended effect, and it may not need to keep inflicting pain on the economy.

It’s hard to overstatejust how delicate the situation is. In fact, just today the IMF’s managing director, Kristalina Georgieva, described the world as being in a period of “historic fragility” after a torrent of economic shocks over the last two-and-a-half years, from the pandemic to the war in Ukraine.

That’s why the Fed’s decisions are being so closely scrutinized. When the Fed raises rates as aggressively as it has in the past several months, it creates painful ripple effects around the globe, pushing the US dollar’s value up and forcing other central banks to raise their own rates as well. All of which could tip the world’s biggest economies into a recession,the UN has warned.

Investors and economists will be hyper-focused on wages in today’s jobs report.

The Fed and others would be happy to see wage growth slow down. Less money in our wallets leaves us with less spending power, and when we stop buying things, prices go down. In theory, anyway. That’s just one part of the large and complicated inflation puzzle.

In the last jobs report, wages were up 5.2% over the last 12 months. That’s historically high (woo!) but it doesn’t keep up with inflation, which is hovering around 8% year over year (boo!).

Wages pose a particular conundrum for the Fed. It wants us to shop just alittleless – but not a lot less. Unfortunately, there’s no magic formula for how much wages need to go down to make a dent.

The risk of wages going down too much, too quickly raises the risk of falling into stagflation, which is as unpleasant as it sounds. Stagflation – a portmanteau of stagnation and inflation – is when economic activity slows while prices continue rising.

When the government releases itslatest monthly jobs reporton Friday, all eyes will be searching for signs that the labor market is loosening up — a key factor weighing on the Federal Reserve as it figures out its next steps to fight inflation.

Economists expect the headline figure to show 250,000 jobs were added in last month. That would be the smallest monthly gain in nearly two years, and well below the average of more than 510,000 for the past 12 months.

Seems counter-intuitive, but the Fed (and much of Wall Street) is actually rooting for that number to go down.

Here’s the thing: Before the pandemic and its whiplash-inducing economic rebound, the US economy averaged about 200,000 new jobs each month.

So, while things are slowing down, they’re still pretty robust relative to those pre-pandemic normal times. And that’s part of what iskeeping inflation elevated.

Investors are holding their breath this morning as they await the release of the Bureau of Labor Statistics’ latest monthly jobs report.

All eyes will be on whether the labor market is showing signs of loosening up — one of the most crucial factors that will help the Federal Reserve determine its next steps in the fight against decades-high inflation.

The US economy is expected to have added 250,000 jobs in September, which would be the lowest monthly jobs gain since December 2020, according to Refinitiv estimates.

If numbers come in as estimates suggest, investors will likely be very happy. A weakening labor market will exert downward pressure on wages and inflation. That means the Fed’s policy is working and that it might pivot away from aggressive interest rate hikes.

August jobs data already indicated that the historically tight labor market has loosened by a notch, reports my colleague Alicia Wallace. The jobs report for that month found that America added 315,000 positions, a much lower level than the 512,000 average monthly gain over the past 12 months.

But while the hotly anticipated headline jobs number is falling, it’s still robust, BLS data shows. The monthly average prior to the pandemic was around 200,000.