New York stock market closes at record highs despite employment anxiety and inflation concerns [New York market morning briefing]

All three major indices simultaneously hit record highs

U.S. Bureau of Labor Statistics sharply revises employment increase down by 911,000

Dimon "Economy weakening…possibility of recession unknown"

The U.S. New York stock market closed at record highs for all three major indices on the 9th (local time) despite concerns about the U.S. economy. The S&P 500 closed at 6,512.61, up 0.27%, while the Nasdaq closed at 21,879.49, up 0.37%, marking an intraday record as well. The Dow Jones closed at 45,711.34, up 196.39 points (0.43%), helped by a surge in UnitedHealth shares.

That morning, the U.S. Bureau of Labor Statistics (BLS) released revised employment figures that seemed to increase investors' worries. The BLS said it lowered the employment increase for the 12 months through March of last year by a whopping 911,000 from the previously reported figure. This not only exceeded the upper end of Wall Street's expectations but was also the largest downward revision since 2002.

Jamie Dimon, CEO of JPMorgan Chase, said in an interview with CNBC that the economy is weakening, and added that whether this is a path to recession or merely a slowdown is unknown.

Because these data are from six months ago, they did not have a major impact on that day's stock prices, but some analyses suggested they could bolster arguments that the U.S. central bank (Fed) needs to cut rates more aggressively this year.

Chris Zaccarelli, Chief Investment Officer (CIO) at Northlight Asset Management, pointed out that employment continues to deteriorate, which could make a fall rate cut this autumn easier but could also dampen the recent stock rally.

The day before, the Nasdaq hit a record high led by Broadcom and Nvidia, but during the session Broadcom shares reversed course and fell more than 2% after two days of strong gains. Even so, Broadcom's one-week gain still stood at about 13%.

Investors are now focusing on key inflation indicators that could determine the Fed's policy direction. Last week's weak employment numbers strengthened expectations for rate cuts, but if this week's inflation readings unexpectedly show strength, the outlook could be greatly shaken. The Producer Price Index (PPI) is scheduled to be released on the morning of the 10th, and the Consumer Price Index (CPI) is due on the 11th.

Zaccarelli warned that if the CPI shows a worsening inflation trend, the market will start to worry about stagflation, that is, rising prices amid economic contraction. He said this year's bull market has been very solid, but it now seems to have reached a turning point that could be tested again.

New York=Park Shin-young, correspondent nyusos@hankyung.com