NEW YORK, Aug 5 — Wall Street stocks fell early today following an unexpectedly strong US jobs report that boosted the odds of further aggressive interest rate hikes by the Federal Reserve to cool the economy.
The US economy added 528,000 jobs in July, far above expectations, while the unemployment rate dipped to the pre-pandemic low of 3.5 per cent, Labour Department data showed.
But while strong hiring is an unmistakable indicator of economic robustness, investors interpreted the report as likely to lead to more big moves by the Fed after the US central bank enacted two straight 75 basis point interest rate increases.
Equity market strength since the Fed’s July 27 meeting has been partly based on expectations that the US central bank could “pivot” to a more moderate stance.
“The key takeaway from the report is that it squashes the friendly notion that the Fed can turn friendly with its monetary policy decisions sooner rather than later,” said Briefing.com analyst Patrick O’Hare.
About 25 minutes into trading, the Dow Jones Industrial Average was down 0.3 per cent at 32,629.38.
The broad-based S&P 500 fell 0.6 per cent to 4,128.91, while the tech-rich Nasdaq Composite Index dropped 1.0 per cent to 12,595.27.
Among individual companies, Warner Brothers Discovery plunged more than 15 per cent after reporting a US$3.4 billion (RM15 billion) loss, much of it due to merger-related costs. — AFP