NEW YORK (AP) — U.S. stocks fell in premarket trading after a hotter-than-expected hiring report suggested the Federal Reserve will need to remain aggressive in its efforts to fight the inflation
S&P 500 futures fell 1% after being slightly higher just before the Labor Department released its latest jobs numbers, which showed an increase of 528,000 jobs, compared with expectations for a gain of 250,000 jobs.
The Dow Jones Industrial Average fell 0.7% and the Nasdaq fell 1.3%. Bond yields rose, with the 2-year Treasury yield rising to 3.2%. The 10-year Treasury yield rose to 2.81%. Yields had been retreating on expectations that the Fed might ease the pace of rate hikes a bit as the US economy slowed, giving a boost to the stock market.
Markets in London, Paris and Frankfurt were lower, while Shanghai and Tokyo advanced. Oil prices retreated.
The Fed has raised its benchmark rate twice by 0.75 percentage points this year, triple its usual margin and the biggest hikes since the early 1990s.
Investors fear that rate hikes by the Fed and other central banks in Europe and Asia to control inflation nearing multi-decade highs could derail economic growth.
Fed officials have sought to calm fears that the United States could slide into recession by pointing to a strong labor market as evidence that the economy can tolerate higher borrowing costs.
In Asia, the Shanghai Composite advanced 1.2% to 3,227.03 and the Hang Seng in Hong Kong gained 0.1% to 20,201.94.
Tokyo’s Nikkei 225 gained 0.9 percent to 28,175,897 after June cash labor earnings rose 2.2 percent from a year ago, although forecasters warned the strength was unlikely to last . Much of the increase was due to half-yearly bonuses that are paid in June.
Seoul’s Kospi rose 0.7% to 2,490.80 and Sydney’s S&P ASX 200 advanced 0.6% to 7,015.60.
India’s Sensex rose 0.1% to 58,381.11 after the Reserve Bank of India raised its benchmark interest rate by half a percentage point to 5.4%. Central bank governor Shaktikanta Das forecast economic growth of 7.2 percent in the year to March and inflation of 6.7 percent.
New Zealand and Bangkok decreased while Singapore increased.
Jakarta advanced 0.4 percent after Indonesia’s economy grew a stronger-than-expected 5.4 percent in the last quarter.