Yesterday, the big US stock market saw a drop, especially the Dow which went into the red for the year. On a brighter note, there were more job opportunities in the US in August than experts anticipated. This shows that the economy is still going strong, and it’s likely that interest rates will stay up for a while.
The Dow Jones took a dip, shedding 496.25 points, about 1.48%, landing at 32,937.1. Meanwhile, the S&P 500 also saw a decline of 69.39 points, roughly 1.62%, settling at 4,219. As for the Nasdaq Composite, it experienced a notable drop of 277.28 points, approximately 2.08%, concluding at 13,030.49.
Imagine the stock market like a giant seesaw. Since the end of July, it’s been on a bit of a slide, losing over 40% of its overall value. This is after a pretty strong run earlier in the year. There’s this thing called the CBOE volatility index, which is like a ‘fear meter’ for Wall Street. And recently, it spiked up to levels we haven’t seen since late May.
Now, think of the big players in the tech world – the likes of Amazon, Microsoft, and Nvidia. They’re like heavyweight champs in this market game. But when interest rates shoot up, they tend to take a hit. And that’s exactly what happened. Amazon’s stock fell about 3.9%, Microsoft’s dropped by 3%, and Nvidia lost about 2.8%.
Alright, so here’s the scoop on what’s been happening. The 10-year Treasury yield, which is like a measure of how much the government pays on its debt, went up to 4.80% from 4.69% in just a day. That’s quite a jump from the 0.50% it was at during the early days of the pandemic.
Why? Well, folks are a bit jittery because they think the Federal Reserve might keep interest rates high for a longer stretch. This is because in August, there was this unexpected surge in job openings, especially in the professional and business services sector. Basically, lots of businesses needed more people.
So, the job openings shot up by 690,000, hitting 9.610 million at the end of August. That’s the highest it’s been in over two years. And to top it off, they even revised the July numbers, which were initially reported at 8.827 million, but turns out it was actually 8.920 million.
All in all, it’s showing that the job market is still pretty tight, and this might nudge the Fed to think about raising interest rates next month.
Oil prices rebounded today after taking a bit of a dip, easing off from their summertime highs. A barrel of the usual US crude went up by 41 cents, settling at $89.23, a climb from its $70 mark during the summer. Meanwhile, the global standard, Brent crude, rose by 21 cents to $90.92 per barrel. OPEC is getting together to check on the world oil scene soon, but there’s not much expectation for any big policy shifts.
Over in the currency world, the US dollar started strong but then took a tumble against the yen. It briefly touched above the 150 yen-per-dollar level for the first time since October 2022, sparking thoughts that the Bank of Japan might have stepped in.
As for gold, it’s not having the best day. It’s been stuck near a seven-month low, weighed down by a robust dollar and higher bond yields. This is all due to the belief that US interest rates will hang on at their current levels for a good while. Right now, spot gold is down 0.1%, sitting at $1,825.09 per ounce. That’s the lowest it’s been since early March. Over in the US, gold futures settled 0.3% lower at $1,841.50 per ounce.
In the bustling Asian markets, Hong Kong’s Hang Seng took a notable dip of over 3%, largely due to investors offloading property shares. This brought the Hang Seng index to 17,278.37, a 3% decrease. Over in mainland China and South Korea, the markets remained closed for holidays. Meanwhile, Tokyo’s Nikkei 225 index saw a 1.5% drop, resting at 31,282.32, and Australia’s S&P/ASX 200 experienced a 1.1% slide to 6,953.60. India’s Sensex also saw a modest decline of 0.7% to 65,408.18. Bangkok’s SET faced a 1.5% downturn, and Taiwan’s Taiex witnessed a 0.3% dip.
