U.S. Stocks Open Lower After Strong Jobs Report; Fed Chair Powell to Speak Today
By U.S. stocks opened lower Monday morning after the release of a stronger-than-expected jobs report on Friday, as investors weighed the potential implications of the data on monetary policy.[0] The Dow Jones Industrial Average fell 0.1%, or 35 points, the Nasdaq was down 1%, and the S&P 500 fell 0.62%.[1] The 10-year U.S. Treasury yield rose 10 basis points to 3.64%.[2]
PayPal Holdings (PYPL) dropped more than -3% after Raymond James downgraded the stock to market perform from outperform, and lowered its price target to 133 from 136.[3] Following the announcement that Newmont (NEM) would be making an all-stock purchase of Newcrest Mining (NCMGY), the former's stock value dropped by 4.8[4] Prior to the start of market trading, Tyson Foods (TSN) experienced a drop of over 5%, due to their Q1 sales of $13.26 billion being lower than the consensus of $13.52 billion.[3]
Catalent (CTLT) surged more than +24% after a Bloomberg report said that Danaher is said to be interested in acquiring the company.[5]
Today, investors will be seeking further indications of the trajectory of U.S. interest rates, with Federal Reserve Chair Jerome Powell to address the Economic Club of Washington at 12:40 p.m.[6] [7] On the earnings front, notable companies reporting this week include Disney (DIS), BP (BP), PepsiCo (PEP), Uber (UBER), Chipotle Mexican Grill (CMG), AbbVie (ABBV), and Dell Technologies (DELL).[8]
The price of oil rose, with West Texas Intermediate crude increasing by 0.7% to a per barrel rate of $73.93.[6] Brent crude, the global standard, rose 1.63%, reaching a price of $81.24.[9]
Overall, investors remain wary of potential rate hikes by the Federal Reserve in the coming months, as the strong jobs report added to the uncertainty. The December import and export numbers were released, causing the trade balance to increase.[10] The international trade in goods and services came in at -$67.40B, which was worse than the expected -$68.8B and worse than the –[10]
0. “Stocks fall on Friday, but S&P 500 notches winning week as strong 2023 continues” CNBC, 3 Feb. 2023, https://www.cnbc.com/2023/02/02/stock-futures-fall-after-earnings-reports-from-apple-alphabet-disappoint-investors.html
1. “Dow Jones Futures Fall As Apple, Google, Amazon Skid, Jobs Report Looms; Market Rally Due For Pullback …” Investor's Business Daily, 3 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-apple-google-amazon-skid-jobs-report-looms-market-rally-due-for-pullback/
2. “Dow, S&P 500, Nasdaq continue post-jobs report slide as Fed worries persist” Seeking Alpha, 6 Feb. 2023, https://seekingalpha.com/news/3932518-dow-sp-500-nasdaq-continue-post-jobs-report-slide-as-fed-worries-persist
3. “Markets Today: Stocks Fall on a Hawkish Fed Outlook” Barchart, 6 Feb. 2023, https://www.barchart.com/story/news/13940556/markets-today-stocks-fall-on-a-hawkish-fed-outlook
4. “Stock Market On The Defensive Ahead Of Powell's Comments; C3.ai Up 150% | Investor's Business Daily” Investor's Business Daily, 6 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/stock-market-catches-it-breath-after-recent-gains-onsemi-shows-strength/
5. “Stocks Lower On The Outlook For Hawkish Fed” Barchart, 6 Feb. 2023, https://www.barchart.com/story/news/13944294/stocks-lower-on-the-outlook-for-hawkish-fed
6. “Stock market news live updates: Stocks start week lower as investors ponder Fed's rate path” Yahoo News, 6 Feb. 2023, https://news.yahoo.com/stock-market-news-live-updates-february-6-2023-111713832.html
7. “Stock Market Today: Dow Futures Waver; Fed's Powell Due to Speak” The Wall Street Journal, 7 Feb. 2023, https://www.wsj.com/livecoverage/stock-market-news-today-02-07-2023
8. “Stock Market News Today: Indices Begin Week on a Low Note” TipRanks, 6 Feb. 2023, https://www.tipranks.com/news/stock-market-news-today-futures-down-on-solid-jobs-report-and-fed-speech-ahead
9. “Stock market news today: Yields jump ahead of speech from Fed's Powell” Markets Insider, 6 Feb. 2023, https://markets.businessinsider.com/news/stocks/stock-market-news-today-dow-sp500-bond-yields-jerome-powell-2023-2
10. “Nasdaq, S&P futures rebound slightly as Wall Street awaits Jay Powell” Seeking Alpha, 7 Feb. 2023, https://seekingalpha.com/news/3932699-nasdaq-sp500-dow-jones-stock-market
