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Stock Market Today: Dow Slips Ahead of Jobs Data as Fed Speakers See More Hikes

Stock Markets Oct 06, 2022 04:25PM ET
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By Yasin Ebrahim

Investing.com -- The Dow fell Wednesday, as investors digested remarks from several Federal Reserve officials on the need to stick with the rate hikes to quell inflation ahead of the crucial jobs report due Friday.

The Dow Jones Industrial Average fell 1.2%, or 346 points, the Nasdaq slipped 0.68%, and the S&P 500 fell 1%.

Fed speakers continued to push back against market bets of a Fed pivot, insisting that the job to cool above-trend inflation was far from over.

Chicago Fed President Charles Evans said the fed “has further to go,” forecasting interest rates to rise about to a range of 4.5% to 4.75%, flagging ongoing growth in shelter and car prices as key drivers of core inflation.

Other fed members including Minneapolis Fed president Neel Kashkari were also in favor of further tightening, saying the central bank was "quite a ways away” from pausing rate hikes.

Treasury yields moved higher on the remarks, pushing rate-sensitive sectors of the market like utilities and consumer staples, both of which tend to be used as bond proxies, lower.

Tech stocks also faltered, with Microsoft Corporation (NASDAQ:MSFT) and Apple Inc (NASDAQ:AAPL) falling nearly 1%.

Twitter Inc (NYSE:TWTR), meanwhile, fell more than 3% after Elon Musk asked a court to pause the tech company’s lawsuit against him as he looks to wrap up the deal on or around Oct.28.

Peloton Interactive Inc (NASDAQ:PTON) ended up 4% after paring losses as the fitness equipment company said it would cut about 12% of its workforce amid efforts to ramp its turnaround plan.

Energy was the sole sector in the green as oil prices settled more than 1% higher, a day after OPEC and its allies, or OPEC+, agreed to cut production by 2 million barrels per day to support prices.

The stumble in the broader market comes a day ahead of the monthly jobs report, expected to show the economy created 250,000 jobs last month. But with inflation front and center, data on how many people entered the labor market, or the participation rate, and wage growth will likely dominate investor attention.

“With inflation still running at a high rate, people are eating through their savings that they stockpiled over COVID, so there is reason for people to engage more in the labor force,” Jeff Hibbeler, Director of Portfolio Management and Senior Portfolio Manager at Exencial Wealth Advisors, told Investing.com in an interview on Thursday.

A better-than-expected jobs report, however, will likely be interpreted as bad news for stocks as it could persuade the Fed to remain on the rate hike course.

“Until either the Fed starts to slow the pace of tightening or investors can see the light at the end of the tunnel for rate hikes, I would say that good [economic] news is bad news for [stocks],” Hibbeler added.

Stock Market Today: Dow Slips Ahead of Jobs Data as Fed Speakers See More Hikes
 

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Comments (13)
Ron Smith
Ron Smith Oct 06, 2022 8:55PM ET
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You know its going to be hogher thats why job openings fell
Ron Smith
Ron Smith Oct 06, 2022 8:53PM ET
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270k jobs going to crush in the AM
Dan Vasta
Dan Vasta Oct 06, 2022 7:55PM ET
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Your approach to technical analysis is truly remarkable. May I just ask you... Do you actively trade yourself and what results are you achieving applying this methodology?
Mo Lm
Mo Lm Oct 06, 2022 7:15PM ET
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F the Fed!
Stephen Fa
Stephen Fa Oct 06, 2022 6:20PM ET
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No pivot yet
ZS Beck
ZS Beck Oct 06, 2022 6:17PM ET
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The Fed chasing the ghost here to look at the job report. Baby boomers are retiring.In 2020 29 million baby boomers retiring, and by 2030 another 75 million of them retiring. They accounting 45 million of the Total jobs. Simply there are not enough people here to replace them, we need emigration badly. Companies will strike to fill the position in the years to come. The Fed trying to slow down the job market by raising rates is useless. They just put the economy to the ground.
Stephen Fa
Stephen Fa Oct 06, 2022 6:17PM ET
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Legal merit based immigration is great! Democrats are abusing asylum law.
Maks Mars
Maks Mars Oct 06, 2022 6:17PM ET
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Nonsense, commodities prices need to be smashed down so we need more and more rate hikes
Warm Camp
Warm Camp Oct 06, 2022 6:17PM ET
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Maks Mars  The rate hikes cannot smash price of anything, when money printing goes faster than the hikes.
Warm Camp
Warm Camp Oct 06, 2022 5:41PM ET
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The market is fragile. Oil stocks are the only plays. Biden cannot bring oil price lower, but he definitely has done a lot to lift it higher.
Casador Del Oso
Casador Del Oso Oct 06, 2022 5:31PM ET
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Everyone keeps saying that oil prices are causing inflation. So I opened a position in USO. I will sell later this year. That will help pay for gasoline.
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Casador Del Oso
Casador Del Oso Oct 06, 2022 5:31PM ET
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Thank you. I agree with you on the cause of inflation. Many others don't.
Warm Camp
Warm Camp Oct 06, 2022 5:31PM ET
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Casador Del Oso  These “many others” just want to blame something else for inflation, deflecting attention from the actual cause: reckless social-economic policies.
Warm Camp
Warm Camp Oct 06, 2022 5:31PM ET
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John Healy  To be honest, oil price also has political reasons to go higher, besides general inflation pressure. Biden has stifled domestic oil production, while alienating oil producers abroad. In result, it made oil the best commodity in investment sense, kind of “safe haven” for investors in this market.
John Healy
John Healy Oct 06, 2022 5:31PM ET
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Warm Camp I would agree to the extent that political maneuvering can and does influence the price of oil, but only indirectly. Resticting production, for example, reduces supply. Printing money creates artificial demand. None of this has any place in free-market capitalism. The more governments interfere, the more contrived the pricing will be.
Warm Camp
Warm Camp Oct 06, 2022 5:31PM ET
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Better late than never. Also “everyone” talking about oil causing inflation are mostly Biden’s faithfuls. The actual link is opposite: high inflation causes all prices to go higher, though in oil case it is accelerated by political nonsense coming from the same leader of the faithfuls.
animus advertere
animus advertere Oct 06, 2022 5:31PM ET
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They've been saying the same thing for months now. Too bad they lost credibility from over a decade of insane stimulus. It will take a lot to convince investors who have never known a real bear market to get with the program, just making the fed's job even harder.
Dave Jones
Dave Jones Oct 06, 2022 5:23PM ET
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Jobs data good.....bad news. Jobs data bad.....good news.Jobs data good...good news.Jobs data bad....bad news.Playing with a loaded dice.
animus advertere
animus advertere Oct 06, 2022 5:23PM ET
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Jobs numbers would have to get WAY worse than now to make any difference. The only thing that matters is inflation. (Although it would take this wacky market a while to realize it.)
Dave Jones
Dave Jones Oct 06, 2022 5:23PM ET
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Matters to whom? The market is only obsessed with free money for buybacks.
 
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