Stocks turned lower on Wall Street in afternoon trading Friday, shedding all their gains from an early rally that followed the release of the government’s latest job market update.
Stocks gave up an early rally and closed lower Friday, marking their third losing week in a row and extending Wall Street’s late-summer slump.
“The jobs report today was nice, but it was not enough to obviously sustain the rally,” said Ross Mayfield, investment strategist at Baird. “The bar to clear is ‘does this change the trajectory of the Fed?’ And I don’t know that this report is enough to say yes.” Average hourly pay jumped 5.2% last month from a year earlier, but slowed slightly from July to August. That’s a welcome sign in the inflation fight, as businesses typically pass the cost of higher wages on to their customers through higher prices.
Market watchers such as David Kelly, chief global strategist at J.P. Morgan Asset Management, said they still expect the central bank to raise rates later this month by another 0.75 percentage points. “The Fed is not going to be swayed by one or two pieces of data, and they are steadfast about getting inflation down,” Mayfield said. “They need a really broad and long body of evidence before they’re going to pivot because the last thing they want is to quit too early.”
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