Wall Street wobbles on jobs report, ASX set for flat start; Australian dollar jumps
Stan Choe
Updated ,first published
U.S. stocks felt both the upside and downside of the surprisingly strong report that said the nation’s unemployment rate improved last month.
The S&P 500 index bounced between gains and losses after initially rising to an all-time high before closing down less than 0.1 percent. The Dow Jones fell 66 points, or 0.1 percent, and the Nasdaq composite fell 0.2 percent. Both also erased early gains.
The Australian share market is set for a flat start to the session, with futures at 4.57am AEDT pointing to a 2-point decline at the open. The ASX rose 1.7 per cent on Wednesday. The Australian dollar bounced and reached ¢71.26 at 8.19am AEDT.
Reporting season continues as ANZ publishes a trading update, with AMP, Origin Energy and Temple & Webster also on hand.
Meanwhile, Treasury yields remained elevated in the bond market after the Labor Department said U.S. employers added 130,000 jobs to payrolls last month, more than economists expected. That helped calm concerns that a discouraging report released a day earlier suggested spending by U.S. households, the main engine of the economy, may have stalled.
On the one hand, strong data on employment raises hopes that the U.S. economy can remain solid and continue to generate big profits for companies. Stocks in the energy and raw materials sectors, for example, have jumped to some of the biggest gains in the S&P 500, and their profits tend to be closely tied to the health of the economy.
Exxon Mobil rose 2.6 percent. Smurfit Westrock rose 9.9 percent even though the packaging company reported weaker profit than analysts expected in its latest quarter. He gave fiscal targets for the next five years that some analysts found encouraging.
However, on the other hand, stronger-than-expected employment data for the overall stock market may keep the Federal Reserve on hold when it comes to interest rate cuts. Higher rates can affect stock prices and the prices of all kinds of other investments.
After Wednesday’s report showed a slowdown in the U.S. unemployment rate, traders withdrew their bets on when the Fed might start cutting interest rates again, according to data from CME Group. Bets fell further into the summer months after a new Fed chairman took office.
If Wednesday’s jobs report had shown a rise in the unemployment rate or other deterioration in the labor market, that could have pushed the Fed to continue cuts more quickly.
Low interest rates would provide support to the economy and financial markets, although at the expense of potentially worsening inflation. The next monthly update on U.S. consumer-level inflation will arrive on Friday and will likely have another big impact on the Fed’s plans.
Following the jobs report, the yield on the 10-year Treasury note rose to 4.17 percent from 4.16 percent on Tuesday. The yield on the two-year Treasury note, which moves closer to expectations for the Fed’s actions, rose further. It increased from 3.45 percent to 3.51 percent.
Of course, things are still not entirely clear for the US economy. Wednesday’s report included significant revisions to say employers added just 181,000 jobs in all of last year. This is less than a third of the previously reported figure of 584,000 and the weakest indicator in a year since 2020, when Covid-19 stalled the economy.
The overall employment report still looked like an encouraging signal for the economy.
“We all knew there would be downward revisions, but they were better than expected,” Brian Jacobsen, chief economic strategist at Annex Wealth Management, said of the 2025 discounts.
On Wall Street, Robinhood Markets fell 8.8 percent even though the trading and investing app reported stronger profits than analysts expected in its latest quarter. Its revenues fell short of forecasts, and analysts highlighted concerns about Robinhood’s expense forecasts in 2026, as well as how long the slowdown in crypto trading would last.
Crypto prices have fallen recently, with Bitcoin’s price falling towards US$67,000 on Wednesday. It has lost nearly half of its value since breaking a record in October.
Moderna fell 3.5 percent after the U.S. Food and Drug Administration said it declined to consider its application for a new flu vaccine made with Nobel-winning mRNA technology. It’s the latest sign of the FDA’s intense scrutiny of vaccines under Surgeon General Robert F. Kennedy Jr.’s administration.
Kraft Heinz rebounded from an early loss, gaining 0.4 percent after CEO Steve Cahillane said he was pausing a planned split of the company into two businesses as he tries to return the company to profitable growth. It also announced that it will invest $600 million in marketing, sales, research and development.
Overall, the S&P 500 fell 0.34 points to 6,941.47 points. The Dow Jones Industrial Average fell 66.74 to 50,121.40, and the Nasdaq composite fell 36.01 to 23,066.47.
Indices in foreign stock markets followed a mixed course in Europe following the positive performance in Asia.
While England’s FTSE 100 index gained 1.1 percent in value, South Korea’s Kospi index rose 1 percent with two major moves.
