the Dow Jones Industrial Average loses almost 150 points in mid-day trading due to hot employment data that reinforced the view of a higher-for-longer outlook for interest rates. The latest ADP and JOLTs Job figures report showed that the US labor market is still tight, which underpins the conviction that the Federal Reserve's monetary policy tightening may not be over yet.
On the policy side, Fed Chair Jerome Powell recently testified to Congress that the central bank would likely need to raise rates more than expected in response to recent hotter-than-expected employment and inflation data. Powell added that the size of the next interest rate increases is dependent on upcoming jobs and inflation data.
The Fed's tightening monetary policy has a significant impact on the stock market, particularly on interest-sensitive stocks. The Dow Jones Industrial Average, which is a blue-chip stock market index, reflects the performance of 30 large publicly traded companies in the US.
Meanwhile, the S&P 500 and the Nasdaq were little changed. The S&P 500 is a stock market index that measures the stock performance of 500 large companies listed on the US stock exchanges, while the Nasdaq Composite Index reflects the performance of more than 3,000 technology and growth companies.
Among single stocks, Tesla fell for a third day, down by more than 3% after Berenberg downgraded the stock to "hold".
In conclusion, the recent market movements reflect the ongoing uncertainty surrounding the US economic recovery and the Federal Reserve's monetary policy. As always, investors should focus on long-term investment goals and not be overly swayed by short-term market movements.