Wall Street is still weighing risks. The US debt trading deal prevents the US from defaulting on its debt. Market participants are trying to draw conclusions from a large deal of macroeconomic data. Market sentiment is confused by comments from Fed’s policymakers, strong data on the US labor market, and anticipation of the nonfarm payrolls.
The benchmark stock indices traded in the red yesterday on a pessimistic note.
The Dow Jones shed 134 points or 0.41% intraday. The Nasdaq also lost its optimism and closed 0.63% down. The S&P 500 dropped by 0.61% to close at 4,179.
The major stock indices traded mixed in the New York pre-market. The S&P 500 is expected to trade in the corridor between 4,150 and 4,220.
Wall Street indices closed lower on Wednesday because the deal on the US debt ceiling was still unsettled. Investors were alarmed by strong data on the labor market.
The stock market came under selling pressure because investors feared that the House of Representatives could not approve the debt ceiling and budget cuts.
Nevertheless, most analysts anticipated lawmakers would vote for the bill to avert the prospects of the US defaulting on its debt. US President Joe Biden said that he would sign the bill into law by next Monday.
Market sentiment turned sour yesterday in light of a fresh JOLTS report by the Department of Labor. The number of vacancies in the US unexpectedly rose in April, thus proving steady strength of the labor market. In turn, this implies wage growth and inflation acceleration.
At the same time, Fed member and Vice Chairman candidate Philip Jefferson said that the decision not to raise the funds rate in two weeks would give policymakers time to see more economic data before the next policy move. Philadelphia Fed President Patrick Harker also said on Wednesday that he is poised to support "skipping" the rate hike for now.
In addition to these statements, the Federal Deposit Insurance Corporation said on Wednesday that the total volume of bank deposits in the US shrank by a record 2.5% in the first quarter after the failure of two large banks.
In this context, the S&P 500 financial sector fell by 1.1%, while banking sector alone sank by 2.0%. Shares of Advance Auto Parts tumbled by 35.0%, the biggest drop in the S&P 500 after the auto parts retailer cut its full-year guidance. Shares of other auto parts manufacturers fell by 2.7-5.6%.
Shares of Nvidia shed 5.7% intraday after hitting an all-time high, while Intel posted the biggest gain in the S&P 500, climbing by 4.8% as the chip maker said it was on track to top its second-quarter revenue guidance. Intel shares jumped by 14.7%, the biggest three-day rally in more than 10 years.
At the same time, the S&P 500 gained 0.2% over the month, the Dow lost 0.3%, and the Nasdaq grew considerably by 5.8%.
US stock index futures rose on Thursday after the House of Representatives passed a bill to suspend the national debt ceiling, but later pulled back on data from the labor market.
The bill to suspend the 31.4 trillion-dollar debt ceiling was passed with majority support from both Democrats and Republicans and will now go to the Senate where lawmakers will pass it before a deadline on Monday when the government runs out of money.
Even after the vote in the House, the stock market remained in a tight range as investors focused on economic indicators that will set the tone for the US Federal Reserve and provide more details on the impact of its hawkish monetary tightening on the economy.
If the Fed misses a rate hike this month, it is probably because it is just as confused as everyone else by US economic conditions.
The rebound in the number of vacancies in the US in April showed that the labor market has contracted again. Investors were even spooked by the Chicago manufacturing survey because of a sharp contraction in manufacturing activity last month.
The private sector employment and data on wages for May could hardly calm down the market today.The US private sector added 278,000 jobs in May from 291,000 jobs in April, much more than the forecast for 170,000 jobs. Small businesses created 235,000 jobs, medium companies – 140,000, whereas large companies reported 106,000 layoffs.

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00:00 INTRO
00:35 S&P500
01:11 QUOTES
05:46 ADP NONFARM EMPLOYMENT CHANGE (MAY)
06:16 US INITIAL UNEMPLOYMENT CLAIMS
07:23 USDX
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