Dow bounces again to flat, recouping a 200-point loss in unstable buying and selling after a powerful jobs report
The Dow Jones Industrial Average rebounded from an earlier loss on the back of a much better-than-expected July jobs report as investors estimated what a strong job market would mean for the Federal Reserve’s rate-hiking campaign.
The Dow Jones Industrial Average lost just 3 points after losing more than 200 points. Bank stocks led the intraday comeback as interest rates surged on strong jobs report. The S&P 500 was flat after previously losing about 1%. The Nasdaq Composite lost about 0.1%.
The job market added 528,000 jobs in July, easily beating a Dow Jones estimate of 258,000. The unemployment rate fell to 3.5%, below the estimate of 3.6%. Wage growth also rose more than expected, up 0.5% for the month and 5.2% higher than a year ago, suggesting that high inflation is likely still an issue.
Shares opened lower after the report, although it appeared to suggest the economy is not currently in recession.
“Anyone who jumped on the ‘Fed is going to switch next year and start cutting rates’ needs to get off at the next station because that’s not in the cards,” said Art Hogan, chief market strategist at B. Riley Financials. “It’s clearly a situation where the economy isn’t screeching here and now or headed for a recession.”
Job growth was expected to slow as the Fed continues to raise interest rates to tame rising inflation, but this report shows the job market is still heating up. The report is crucial as it is one of two the central bank will see before it decides how much to raise interest rates at its September meeting.
July’s major moving averages posted their best month since 2020 on hopes the Fed would slow the pace of its rate hikes. The S&P 500 gained 9.1% last month.