U.S. markets are quiet ahead of the critical U.S. June jobs report with Treasury Secretary Janet Yellen in Beijing attempting to ease tensions between the world's two largest economies.
Futures for the Dow Jones industrials and S&P 500 slipped less than 0.1% before the opening bell Friday.
Yellen is meeting with senior Chinese officials to try to soothe antagonisms over a host of issues and promote global financial stability. Speaking with business people, she criticized China’s treatment of U.S. companies and new export controls on metals used in semiconductors, while defending U.S. controls on technology exports that irk Beijing, saying they’re needed for national security.
The June jobs report Friday will likely have a much bigger impact on Wall Street than anything else this week. Analysts expect that the U.S. economy gained about 205,000 jobs last month. That would be the fewest for a single month since December of 2020, but still a solid showing that does not imply the Fed is down with its work to slow the economy and tamp down inflation.
On Thursday, the payroll provider ADP reported an explosive increase in hiring by private employers in June — 497,000 added jobs, nearly twice as much as expected. ADP’s hiring figures, though, often diverge from the government’s official data, but it was still enough to send U.S. markets sliding on anxiety over how a seemingly bulletproof jobs market will influence the Fed.
The Federal Reserve could respond by maintaining higher interest rates for longer in its campaign to cool the economy, and inflation.
Another report showed the number of U.S. workers applying for unemployment last week remains low.
“As the growth trajectory of the U.S. economy improves, it becomes increasingly more challenging to envision what would cause the Fed to CUT rates anytime soon, as many market participants have been anticipating,” Stephen Innes of SPI Asset Management wrote.
Yields jumped in the bond market as traders ramped up bets for the Fed to keep rates higher for longer than previously expected. Hopes for a potential cut to interest rates by early next year diminished.
In Europe at midday, Germany’s DAX and the CAC 40 each advanced 0.5%. Britain’s FTSE 100 lost 0.2%.
In Asian trading, Tokyo’s Nikkei 225 shed 1.2% to 32,388.42 and the Hang Seng in Hong Kong dropped 0.9% to 18,365.70. The Shanghai Composite index lost 0.3% to 3,196.61, while Australia’s S&P/ASX 200 sank 1.7% to 7,042.30.
India’s Sensex sank 0.6% and Bangkok’s SET index was little changed.
In other trading Friday, U.S. benchmark crude oil added 32 cents to $72.12 per barrel in electronic trading on the New York Mercantile Exchange. It gained 1 cent to $71.80 on Thursday.
Brent crude, the pricing basis for international trading, picked up 30 cents to $76.82 per barrel.
The dollar slipped to 143.26 Japanese yen from 144.06 yen. The euro rose to $1.0898 from $1.0890.
On Thursday, the Dow dropped 1.1% and the S&P 500 lost 0.8%. The Nasdaq composite gave up 0.8%.
——
Kurtenbach reported from Bangkok; Ott reported from Silver Spring, Md.
