Stocks & Funds

U.S. Stocks on a Downward Trend Despite Positive ADP Job Reports

U.S. stock ADP job reports

After an unexpectedly strong report on private payrolls, U.S. stocks fell Thursday as investors awaited Friday’s ADP job reports.

The Dow Jones Industrial Average fell 343 points or 1% at 9:41 ET (13:41 GMT), while the S&P 500 fell 1% and the NASDAQ Composite fell 1.1%.

After the Federal Reserve released the minutes of its June meeting, Wall Street fell on Wednesday, as policymakers agreed that more rate hikes are likely to lower inflation.

It is expected that the Fed will hike rates by a quarter of a percentage point in July and again in November. Any further increases will come after the Fed paused on rate hikes in June to assess the impact of their 10 consecutive rate hikes.

In preparation for Friday’s ADP job reports for June, economic data due this week include job openings, jobless claims, and private payrolls. In June, ADP reported 497,000 new jobs, well above expectations of 228,000. Jobless claims last week came in slightly higher than expected.

It is possible that the Fed will raise rates again if the jobs report is strong.

As the Fed ended its tightening phase, tech stocks rose to start the year, with the Nasdaq rising 32% in the first half of 2023.

Meta Platforms, Inc. (NASDAQ: META) shares fell 0.1% after the company launched its competitor to Twitter late Thursday. However, the stock hit a new 52-week high in early trading.

Treasury Secretary Janet Yellen arrived in Beijing for a weekend of meetings with Chinese officials, as tensions between the U.S. and China over technology continue to rise.

Intel Corporation (NASDAQ: INTC ) and Qualcomm Incorporated (NASDAQ: QCOM ) shares fell 2.4% and 1.4%, respectively.

After JetBlue Airways Corporation (NASDAQ: JBLU ) announced it would end its alliance with American Airlines (NASDAQ: AAL ) and focus on its purchase of Spirit Airlines (NYSE: SAVE ), shares declined 5%.

Gold Futures fell 0.79% to $1,911. Crude Oil WTI Futures fell 1.7% to $70.54 a barrel, while Brent Oil Futures crude fell 1.5% to $75.44 a barrel.

Private employers created nearly twice as many jobs last month as economists expected, according to a report from ADP Research Institute.

“APD’s report is not always a good predictor of the US government’s monthly jobs report,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office.

While it was higher than expected, a separate report showed the number of US workers applying for unemployment last week remained low relative to history.

The US government reported on Thursday that employers advertised fewer job openings than expected in May, which offered a nuanced picture. Despite the fact that more people quit their jobs, the data also showed that inflation may not be as strong as it seems.

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