Dow Jones Industrial Average stumbles following US data

The US jobs data came in below forecasts, causing the Dow Jones Industrial Average (DJIA) to drop 400 points on Thursday, losing territory for the second time this week. Since the day’s initial shock selloff, stocks have recovered, but the Dow Jones is having difficulty leveling off for the day. ADP Employment Change revealed the lowest rate of job growth since February 2021, which made investors even more wary of taking on risk as they considered the possibility of a US recession.

On Thursday, the Dow Jones fell 400 points as long as economic worries continue. As hiring declines, investors are becoming more and more concerned about a recession. The NFP jobs data dump on Friday is approaching, worrying investors.


Payroll processor ADP reports that net new employment in the US increased by 99K in August, significantly less than the 145K projected and down from the revised 111K in July. The ADP adds for August are the lowest reading since early 2021, which has caused investors to become more risk averse and rekindle their worries that the US may be into a recession.

The ADP employment data, albeit it has a patchy track record of accuracy, is a good indicator of what the markets might anticipate from Friday’s US Nonfarm Payrolls (NFP) report. Before the Federal Reserve’s (Fed) forthcoming rate call on September 18, when Fed officials are widely expected to begin a rate-cutting cycle, August’s NFP print represents the last meaningful labor update.

The CME reports that rate markets are presently placing 40% of their bets on the Fed to surprise everyone by slashing rates by 50 basis points later in the month, while the remaining 60% are placing their bets on a more subdued 25 basis point starting rate decrease. Investors hope to assess the extent of the Fed’s first rate decrease since the rate was slashed by 100 basis points in March 2020 by analyzing this Friday’s NFP data.