Equities: Labour data weighs on stocks – Danske Bank
Danske Research notes that a strong US labour market report increased expectations of a more hawkish Federal Reserve, pressuring global equities. The S&P 500 declined while the Stoxx 600 posted a small gain, with cyclicals outperforming and rate-sensitive sectors underperforming.
In the latest market update, strong US labour market data dampened equities, prompting expectations of a more hawkish Federal Reserve. The S&P 500 slipped 0.4%, while the Stoxx 600 experienced a slight gain of 0.1%. Cyclical sectors, led by industrials, semiconductors, and materials, outperformed, while rate-sensitive industries such as biotech, software, and real estate lagged.
Roughly 65% of US stocks closed lower on the day. Despite the weakness, this marks a generally cyclical week, with Financials, communication, and technology sectors gaining around 2% over the past week, while defensive areas experienced a 0.5-1% decline. The US markets are closed for Labour Day, and the USD/JPY remains steady above 156.00 due to escalating US-Iran tensions and rising Fed rate-hike bets.
Gold traded lower, battling the $4,400 level amid increasing oil prices and global inflationary concerns. Cardano saw a recovery after a 15% surge last week but now trades around $0.222, with mixed sentiment in derivatives data.
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