S&P 500, Nasdaq 100 - Prices, Charts, and Analysis
- Recession fears are pushed into the background for now.
- Nasdaq[1] 100 stalling at trend resistance.
- S&P 500[2] stumbles at a two-month high.
The latest US Jobs Report has put the brakes on US equities with the release showing an unexpected surge in hiring. A bumper 528k new jobs were created in July, pushing the unemployment rate down to 3.5%, the lowest level since February 2020.
Friday’s labor report has now pushed back all thoughts of the Fed slowing down the pace of interest rate hikes as the central bank continues to target stubbornly high inflation. Recent talk of a Fed pivot on rates, due to a weakening economy, is not borne out by the latest NFP[3] report which shows the US jobs market in rude health. While today’s release will allow the Fed more flexibility to hike rates higher and faster, it is only one data point. A look at the US Treasury market shows the UST2s/10s curve inverting further, now around -40bps, and this continues to point to a recession in the US, despite the semantics used by the Fed to say all is ok. As always, data releases remain key, while Fed chatter also needs to be closely listened to.
Next week, all eyes will be on Wednesday’s inflation report with core inflation expected to tick higher again. If this report shows inflation falling, however, it may fuel thoughts of a ‘soft landing’ in the US, a goldilocks moment for the Federal Reserve.
For all market-moving economic data and events, refer to the DailyFX calendar[4]
The recent rally in the Nasdaq 100 has tested and failed its first attempt to break trend resistance off the late-December 2021 high. The
