American stocks continue to decline and were unable to recover from a poor start to the year on Thursday. The Dow Jones Industrial Average closed just slightly above unchanged, while the S&P 500 fell by around 0.3%. The Nasdaq Composite initially saw gains but ultimately fell by nearly 0.6% at the end of the session. Investors are hopeful for explanations regarding a potential interest rate cut in March, but remain uncertain following the release of the Fed minutes on Wednesday. Although officials agreed that rates should be lowered until 2024, there were indications that they may remain at a high level “for some time” depending on inflation. This uncertainty further impacted the decline in stock values.
While there have been some positive notes, several data released on Thursday indicate that the job market continues to grow while wages continue to decline. The ADP Employment Report showed that private businesses added 164,000 jobs in December, exceeding expectations. Additionally, the number of unemployment benefit claims filed last week was lower than economists’ estimates. These indicators are a positive sign in the fight against inflation.
Yields on US bonds also saw an increase, with the yield on 10-year Treasury bonds approaching 4% after Wednesday’s decline. However, energy-related stocks fell, with the S&P 500 Energy Select ETF being the worst-performing sector, losing over 1%.
Looking ahead, investors will closely monitor the December employment report, which is scheduled to be released on Friday morning. It is expected that the report will show the addition of 175,000 non-farm jobs in December, and a slight increase in the unemployment rate. This will be a key test for the end-of-year bull market as investors assess the health of the job market and its impact on future economic growth.
Overall, further declines in the American stock market reflect ongoing concerns about economic growth and uncertainty surrounding interest rates. Despite positive market indicators, overall sentiment remains cautious.
FAQ:
– How did the American stock market perform on Thursday?
The American stock market continued to decline on Thursday following a poor start to the year.
– Is there hope for an interest rate cut in March?
Investors are expecting an interest rate cut, but the Fed minutes have sparked uncertainty.
– Is the job market in the USA stable?
Many data indicate that the job market in the USA is still stable, although wages are declining.
Definitions:
– ADP – Automated Data Processing, an American company specializing in outsourcing and human resource management systems.
Sources:
– https://www.dowjones.com/ (source domain)
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