Wall St logs sharp losses as labor market strength stokes rate-hike fears

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Wall Street's main indexes ended sharply lower after strong labor market data boosted fears of more interest rate hikes from the Federal Reserve

Exxon shares drop as co signals sharp drop in profitJuly 6 - Wall Street's main indexes ended sharply lower on Thursday in a broad sell-off after data showing a strong labor market boosted bond yields and fanned fears the Federal Reserve will be aggressive in raising U.S. interest rates.

The S&P 500 posted its biggest daily percentage drop since May 23. The Dow logged its biggest single-day fall since May 2., suggesting the labor market remained solid despite growing risks of a recession. A separate report showed U.S. job openings dropped in May, but remained at elevated levels. A day before the monthly U.S employment report, evidence of a solid labor market spurred expectations the Fed will keep interest rates higher for longer to tame stubborn inflation.

“We don’t see any softening in the labor market,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “The Fed doesn’t have to worry about the jobs market. When you look at their mandate, they have no reason not to keep hiking and to keep hiking for a while.”

 

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