Global market update: Dow Jones falls over 400 points as jobs data adds to rate worries

The Dow Jones fell 496.25 points, or 1.48%, to 32,937.1, the S&P 500 lost 69.39 points, or 1.62%, at 4,219 and the Nasdaq Composite dropped 277.28 points, or 2.08%, to 13,030.49.

The stock market has lost more than 40% of its value since the end of July, after charging higher for much of the year. The CBOE volatility index, Wall Street’s “fear gauge,” hit its highest since late May.

Big Tech stocks were some of the heaviest weights on the market. They and other high-growth stocks are seen as some of the biggest victims of high interest rates. Amazon fell 3.9%, Microsoft dropped 3% and Nvidia lost 2.8%.

The 10-year Treasury yield climbed again Tuesday, up to 4.80% from 4.69% late Monday and from just 0.50% early in the pandemic. It climbed to 16-year highs on investor worries that the Fed will hold interest rates higher for longer after job openings unexpectedly increased in August.

The US job openings unexpectedly increased in August amid a surge in demand for workers in the professional and business services sector, pointing to a still-tight labor market that could compel the Fed to raise interest rates next month. 

Job openings were up 690,000 to 9.610 million on the last day of August. That was the most in just over two years. Data for July was revised higher to show 8.920 million job openings instead of the previously reported 8.827 million.

Oil prices ticked higher a day after slumping sharply to trim their big gains since the summer. A barrel of benchmark US crude rose 41 cents to settle at $89.23 after charging mostly higher from $70 during the summer. Brent crude, the international standard, rose 21 cents to $90.92 per barrel. OPEC ministers will meet to review global markets on Wednesday. Delegates from the group don’t expect the panel to recommend any policy changes.

The US dollar initially rose but later fell sharply against the yen after briefly rising above the psychological 150 yen-per-dollar level for first time since October 2022, leading some to see signs of intervention by the Bank of Japan.

Gold prices languished near a seven-month low on Tuesday, weighed down by a robust dollar and elevated bond yields as the likelihood of US interest rates staying higher for longer dominated sentiment. Spot gold was down 0.1% at $1,825.09 per ounce at 1:49 p.m. EDT (1749 GMT), after hitting its lowest level since early March. US gold futures settled 0.3% lower at $1,841.50 per ounce.

In Asian markets, Hong Kong’s Hang Seng dropped more than 3% as investors unloaded property shares. The Hang Seng was down 3% at 17,278.37. Markets in mainland China and South Korea remained closed for holidays. Tokyo’s Nikkei 225 index fell 1.5% to 31,282.32, while Australia’s S&P/ASX 200 skidded 1.1% to 6,953.60. India’s Sensex declined 0.7 % to 65,408.18 and Bangkok’s SET was down 1.5% and Taiwan’s Taiex fell 0.3%.

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Updated: 04 Oct 2023, 01:43 AM IST