Wall Street Close: Sellers retake controls as US data doubles tapering woes ahead of NFP
- US equity markets end lower as inflation fears jump back to the table.
- Macroeconomics, Fed’s action favor tapering ahead of the key US data.
- AMC consolidates the rally, PSTH brace for the much-awaited deal.
- US NFP is likely to magnify bearish sentiment even as Biden probes sellers.
Wall Street benchmarks couldn’t withstand the strong US data, not to forget Fed’s early signal of tapering, on Thursday. In doing so, the risk barometers couldn’t cheer US President Joe Biden’s step-back on tax demand.
Technology shares were the biggest hit, taking Nasdaq down by 1.03%, or 141.82 points, to 13,614.5. Further, S&P 500 Futures and Dow Jones Industrial Average (DJI) were second and third in that order while declining 0.36% and 0.07% on a day to 4,192 and 34,577 respectively.
Initial signals of US employment figures flash upbeat numbers the previous day, which in turn put a carpet under the talks of Fed tapering. Among the many job-related economics, a whopping ADP Employment Change of 972K, versus 650K forecast, as well as the weakest Weekly Jobless Claims since March 2020, gained major attention.
On the same line, ISM Services PMI also propelled inflation expectations as the price paid component jumped to the second-highest on record, not to forget the all-time high print of the headline figure.
Additionally, the Fed’s trimming of portfolio sales, one of the programs set to support the economy throughout the pandemic, adds to the tapering woes and weighs on the markets.
Alternatively, US President Joe Biden’s readiness to reconsider corporate tax hike proposal, with a fresh offer of 18% rate versus 25% previous, helped markets to battle the bears.
It’s worth mentioning that the US Treasury yields marked the heaviest jump in three weeks while commodities and Antipodeans couldn’t bear the burden of stronger US dollar, backed by the safe-haven demand.
To be stock specific, the Reddit-frenzied AMC dropped around 18%, after jumping over 90% the previous day, as the theatre chain announced the closing of another stock sale. On the contrary, PSTH gained over 0.60% ahead of the recent positive news suggesting billionaire Bill Ackman’s firm is up for the much-awaited deal with Universal Music.
With the US NFP on the calendar, not to forget a speech from the Fed Chair Jerome Powell, equities may witness a cautious start but will offer a volatile going forward.
Read: US Nonfarm Payrolls May Preview: Questions, questions needing answers