Wall Street Soaring On Dollar Weakens, US Jobs Data

The yield on the benchmark 10-Year US Treasury note fell 9 basis points to 3.66%, a two-week low, while the dollar index, which tracks the greenback against a basket of six developed economy currencies, fell around a quarter point to 110.65. The S&P 500 meanwhile, rose 2.8%, while the Dow Jones Industrial Average and Nasdaq Composite rose 2.5% and 3.3% respectively.

The US labour market finally stopped defying gravity in August, the number of vacancies dropping sharply as the surge in inflation overshadowed the outlook for the economy, prompting employers to scale back their hiring plans.

The jobs data reading, below analysts’ expectations for a total of around 10.775 million, was the lowest in over a year, and represented the biggest monthly decline since the early stages of the pandemic in April 2020.

There is a clear slowing in labour demand. Financial markets took the news as an argument for the Fed to stop raising interest rates aggressively.

There are now 1.61 jobs available for every registered unemployed person, down from 1.97 in July. But while that is still a clear drop, it’s still well above what was normal before the pandemic. The numbers are the first of a series of sensitive data this week from a labor market whose strength this year has been one of the cardinal factors driving interest rates higher.

The reading will be followed on Wednesday by ADP’s report on private-sector hiring in September, which will in turn be followed by the government’s labuor market report on Friday.