Wall Street wavers after October jobs data, hopes for China rebound

NEW YORK (AP) – Stocks wobbled on Friday as Wall Street weighed how to read the latest U.S. jobs data and hopes that the world’s second-largest economy could be set to promotion.

The S&P 500 was 0.1 percent higher in afternoon trade after earlier sitting higher by 2.1 percent. The big swing for the index follows a US government report showing the unemployment rate was higher in October and employers added fewer jobs than a month earlier. Perhaps more important for the market is the decline in average wages for workers last month.

The data gives hope that the Federal Reserve’s deliberate efforts to reduce the labor market may begin to take effect and may help to lower inflation in the country. The decline, however, was more modest than economists had expected. And very few, if any, minds on Wall Street have changed about what will happen next: The Fed will continue to raise interest rates to unprecedented levels this millennium. , a move that will further disrupt the economy and drive down stock prices and other investments. .

As Wall Street chewed on the jobs report, global markets edged higher on continued speculation that China could relax its zero-covid-19 strategy and strengthen the world economy’s biggest source of income. .

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The Dow Jones Industrial Average was up 31 points, or 0.1 percent, at 32,038 as of 12:15 p.m. ET, and the Nasdaq composite was 0.1 percent lower. The Russell 2000, which tracks small-cap stocks, fell 0.2 percent.

Fed Chairman Jerome Powell earlier this week cited the still-heated labor market as one of the reasons the central bank may eventually have to raise rates higher than expected. before. That boosted expectations for Friday’s jobs report, but the data was so mixed that Wall Street refused to agree.

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Some analysts pointed to a slight increase in the unemployment rate to 3.7 percent during October. This raised the possibility of a rate of 3.5 percent in September as low as possible. Big tech companies like Amazon have recently announced hiring freezes or even layoffs to stay afloat in what they see as a weak economy. This could prevent the economy from the dreaded “wage curve” where large jumps in wages and a strong labor market create a vicious cycle that forces inflation higher.

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Others focused on the still hot job market where hiring continues. If anything, Friday’s jobs data could mean that “Fed officials will have to step on the brakes more to slow this economy and control inflation, ” said Russell Price, chief economist of Ameriprise.

Many investors and banks raised their expectations on Friday about the Fed’s final level of interest rates next year, with many eyeing something more than 5 percent after they started this year from zero.

At fund behemoth Vanguard, the investment strategy group said all the data together suggest “nothing to change Vanguard’s Fed expectations” and increased focus on next week’s update on how bad the cost of living was across the country in October.

Markets around the world were shaken in a few minutes after the publication of the employment data in the United States, which is one of the most anticipated reports on Wall Street each month. The two-year Treasury yield, which usually tracks expectations for Fed action, has bounced back several times before easing.

Markets rose higher earlier in the day, in part on hopes that China might ease anti-COVID policies that have sometimes led to entire cities being locked down for weeks.

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Such a move could provide a major boost to the global economy as aggressive interest rate hikes by central banks from America to New Zealand raise concerns about a global recession.

Hong Kong stocks rose 5.4 percent on Friday, while Shanghai stocks jumped 2.4 percent. Both markets ended the week with strong gains.

Copper prices also increased by 7.2 percent. A stronger Chinese economy will consume more raw materials, and shares of miner Freeport-McMoRan rose 9.5 percent for the S&P 500’s biggest gainer.

Two casino companies that derive much of their revenue from the gambling hub of Macao on China’s southern coast are among Wall Street’s stronger stocks. Las Vegas Sands rose 4.1 percent, and Wynn Resorts added 4 percent.

Stocks across Europe also rose. France’s CAC 40 rose 2.4 percent, and Germany’s DAX returned 2 percent.

The two-year Treasury yield fell to 4.71 percent from 4.72 percent on Thursday. The 10-year yield, which helps to command the rate of mortgages and other loans, rose to 4.16 percent from 4.15 percent.

AP Business Writers Yuri Kageyama and Matt Ott contributed.

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