The major Wall Street indexes continued to decline on Thursday as worries grew that the Federal Reserve’s aggressive interest rate policy will trigger a recession ahead of the carefully expected monthly nonfarm payrolls figures.
Markets temporarily found solace in data showing an uptick in weekly unemployment claims before falling further as it gave rise to optimism that the Fed could lessen the gradual rate rises it has been conducting since March – the quickest and highest in decades.
The equities market has been sluggish to comprehend the Fed’s recurrent message that rates would rise longer until it is obvious that inflation is reducing.
Charles Evans, president of the Chicago Fed, was the most recent to discuss the forecast for the institution on Thursday, stating that policymakers anticipate delivering 125 basis points of rate increases by the end of the year due to the weak inflation readings.
According to data, more Americans than expected last week filed new claims for unemployment benefits, but even while demand is starting to slow down due to increased rates, there is still a tight labor market.
Investors will be able to determine whether the Fed changes its intentions to raise interest rates on Friday when the nonfarm payrolls report for September is released.
When policymakers meet on November 1-2, the money markets are putting in an 83% likelihood of a fourth consecutive 75 basis-point rate rise.
Before increasing to a one-week high, the benchmark 10-year Treasury yield first went downward. Real estate saw the biggest decrease of the major S&P 500 sectors, falling 2.9%.
Only energy increased, gaining 1.8%.
