Friday August 5th


Dow futures slide 200 points after strong jobs report likely to keep Fed in hiking mode

U.S. stock index futures fell Friday after the July jobs report was much better than expected, showing a strong labor market that will likely mean more interest rate hikes from the Federal Reserve. Futures on the Dow Jones Industrial Average slipped 222 points or 0.68%. S&P 500 futures lost 1.05% and Nasdaq 100 futures shed 1.43%. The labor market added 528,000 jobs in July, easily beating a Dow Jones estimate of a 258,000 increase. The unemployment rate also ticked down to 3.5%, below the 3.6% estimate. Wage growth also ticked up more than estimated, up 0.5% for the month and 5.2% higher than a year ago, signaling that high inflation is likely still a problem. Job growth was expected to slow as the Fed continues to hike interest rates to tame surging inflation, but this report shows a labor market still running hot. The report is a crucial one as it’s one of two the central bank will see before it decides how much to raise rates at its September meeting. The S&P 500 is up a modest 0.5% on the week, attempting to post a three-week winning streak. The blue-chip Dow has dipped 0.4% this week, while the tech-heavy Nasdaq Composite has outperformed, up 2.7% on the week. Taiwan shares led gains in Asia-Pacific markets as investors shake off China’s military drills following U.S. House Speaker Nancy Pelosi’s visit. Taiwan’s Taiex jumped 2.27% to 15,036.04, with chipmaker TSMC rising 3.2%. The index traded lower this week as U.S.-China tensions increased over Pelosi’s trip. The Nikkei 225 in Japan rose 0.87% to 28,175.87 and the Topix index gained 0.85% to 1,947.17. In South Korea, the Kospi advanced 0.72% to 2,490.8 and the Kosdaq added 0.79% to 831.64. Hong Kong’s Hang Seng index was 0.15% higher in the final hour of trade. Mainland China markets were higher, led by tech stocks. The Shanghai Composite was up 1.19% at 3,227.03 and the Shenzhen Component gained 1.69% to 12,269.21. Oil prices declined slightly on Friday as concern over supply shortages weren’t enough to counteract expected declines in fuel demand. Brent crude declined 26 cents to $93.86. U.S. West Texas Intermediate crude shed 36 cents to trade at $88.18 per barrel. Prices have come under pressure this week as the market has fretted over the impact of inflation on economic growth and demand, but signs of tight supply kept a floor under prices. Gold consolidated off a one-month peak ahead of U.S. labor market data on Friday, but safe-haven inflows triggered by tensions over Taiwan and lower U.S. yields kept bullion on course for a third straight weekly gain. Spot gold fell 0.3% to $1,786.31 per ounce, after hitting its highest level since July 5. Prices were up 1.2% so far this week. U.S. gold futures eased 0.2% to $1,802.60.