U.S. stocks turn lower on employment data worse than expected

Korea Economic Daily

Summary

U.S. stocks turned into a slight decline on employment data that was worse than expected and concerns about inflation.
U.S. Treasury yields rose, and gold and oil prices recorded an all-time high and large gains, respectively.
The outlook for rate cuts could darken if inflation proves persistent despite weakness in the labor market.

Despite hopes for rate cuts, Treasury yields rise and gold prices climb

On the 9th (local time), U.S. stocks turned slightly lower as Treasury yields rose again amid worries over revised U.S. employment figures that were worse than expected and inflation data.

At 10:40 a.m. Eastern Standard Time, the S&P 500 was down 0.1%, the Nasdaq Composite, which hit an all-time high the previous day, was down 0.2%, and the Dow Jones Industrial Average was trading with slight fluctuations around about 45,500 points, similar to the previous day.

U.S. Treasury yields began the session lower from intraday lows but then turned higher. The 10-year Treasury yield rose 2.8 basis points (1bp = 0.01%) to 4.076%, and the 2-year Treasury yield rose 3.4bp to 3.529%.

Spot gold traded on the New York Mercantile Exchange at $3,662.13 per ounce, up 0.7%.

Oil prices surged after reports of a new Israeli attack. West Texas Intermediate (WTI) traded at $63.18, up 1.5%. Gold also hit an all-time high.

Apple fell 0.71% ahead of its largest product launch event of the year, which is expected to include a new iPhone model and Apple Watch.

Shares of the Nebius Group, which signed an AI infrastructure deal with Microsoft worth up to $19.4 billion (about 27 trillion won), jumped more than 35%.

UnitedHealth rose nearly 2% after saying most of its members are expected to enroll in higher-tier Medicare insurance plans next year.

According to the Labor Department's preliminary benchmark revision released that day, the number of paid employees in the U.S. over the 12 months through March fell by 911,000, or about 76,000 per month. August nonfarm payrolls, previously reported last week, increased by 22,000, and the revision showed June employment fell for the first time since 2020. The unemployment rate rose to 4.3%, its highest since 2021.

The Producer Price Index will be released on Wednesday and the Consumer Price Index on Thursday. Markets see the outlook for rate cuts after October as potentially dim if inflation appears persistent despite weakness in the labor market.

Contributing reporter Jeong-A Kim kja@hankyung.com