The S&P 500 and the Dow have slipped after latest data signalled resilience in the US labour market in the face of the Federal Reserve’s aggressive monetary tightening.
The data showed that while US job growth slowed more than expected in June after surging in the previous month, labour market conditions remained tight, with the unemployment rate retreating from a seven-month high and strong wage gains continuing.
“Today’s numbers confirm the job market is still strong… and this report gives the green light to the Fed to raise rates,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
“As far as the markets are concerned, the key is the Fed threat, and as you can see, we’re pulling back in futures.”
Traders stuck to bets the Fed will raise its benchmark interest rate this month to a 5.25 per cent-5.5 per cent range but were sceptical of further hikes beyond that.
Traders anticipate about a 34 per cent chance of a further rate hike in November, down from nearly even odds before the report, according to CME’s Fedwatch tool.
Five out of the 11 major S&P 500 sectors declined in early trading on Thursday.
Wall Street’s main indexes ended sharply lower in a broad sell-off, with the benchmark S&P 500 posting its biggest daily percentage drop in six weeks.
In early trading, the Dow Jones Industrial Average was down 82.28 points, or 0.24 per cent, at 33,839.98, the S&P 500 was down 2.70 points, or 0.06 per cent, at 4,408.89, and the Nasdaq Composite was up 29.21 points, or 0.21 per cent, at 13,708.26.
All three major US stock indexes were on track to end the week lower as escalating tensions between China and the United States also weighed on market sentiment.
Among other early movers, the S&P 500 banking index gained 1.0 per cent.
All major banks, including JPMorgan Chase, Citigroup and Wells Fargo, ticked higher ahead of reporting second-quarter earnings next week.
Tesla rose 1.0 per cent after it said it would offer new buyers of its top-selling electric vehicles in China a cash bonus equivalent to almost $A750 if they have a referral from an existing owner.
Levi Strauss & Co tumbled 7.8 per cent as the denim clothing maker cut its annual profit forecast on Thursday.
US-listed shares of Alibaba gained 5.5 per cent after Chinese authorities said they will impose a $US984 million ($A1.5 billion) fine on Ant Group, ending the affiliate fintech company’s years-long regulatory overhaul.
Advancing issues outnumbered decliners by a 1.87-to-1 ratio on the NYSE and a 2.32-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and three new lows while the Nasdaq recorded 13 new highs and 22 new lows.