Wall Street is waiting to see if more news coming about the economy’s health will be good news or bad.
The US government is reopening following a six-week shutdown, its longest in history. The stock market mostly rose through the shutdown, as it has often done historically, but Wall Street is bracing for potential swings as the government gets back to releasing important updates on the job market and other signals about the economy’s strength.
Wall Street had its second-worst day since April on Thursday. Credit: Bloomberg
The fear is that the data could persuade the Federal Reserve to halt its cuts to interest rates, which can boost the economy but also worsen inflation. Wall Street has already run to records in part on expectations for more such cuts, and a halt in them could hurt the stock market.
The “looming data deluge may spur additional volatility in the coming weeks,” according to Doug Beath, global equity strategist at Wells Fargo Investment Institute.
Traders have already reduced their bets that the Fed will cut its main interest rate at its next meeting in December, now seeing a 50 per cent chance of that, down from nearly 70 per cent a week ago, according to data from CME Group.
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That helped push yields higher in the bond market, which can weigh on prices for stocks and other investments.
The yield on the 10-year Treasury rose to 4.10 per cent from 4.08 per cent late on Wednesday.
On Wall Street, The Walt Disney Co. helped lead the market lower after falling 7.8 per cent. The entertainment giant reported profit for the latest quarter that topped analysts’ expectations, but its revenue fell short.
That helped offset a jump of 6.1 per cent for Cisco Systems after the tech giant delivered profit and revenue that were bigger than analysts estimated.
In stock markets abroad, indexes sagged in Europe following modest gains in Asia.
Tokyo’s Nikkei 225 index rose 0.4 per cent, even as Japanese tech giant SoftBank Group lost another 3.4 per cent. It’s been struggling since it said earlier this week that it had sold all of its $US5.8 billion ($8.9 billion) stake in Nvidia.
AP
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