(New York) The New York Stock Exchange struggled to find a direction Friday shortly after opening, digesting a figure for job creation in the United States that was certainly lower than expected, but less bad than investors had feared.
As of 9:50 a.m. ET, the Dow Jones Industrial Average was up 0.61%, the NASDAQ Index was down 0.20% and the broader S&P 500 Index was up 0.14%.
After weeks of anticipation, Wall Street reacted with a muted reaction to the monthly report from the US Department of Labor, which showed that 142,000 jobs were created in the United States in August.
The figure is lower than the 165,000 new jobs expected by economists, but significantly higher than in June and July.
These two months have been subject to a downward revision of the initial estimates, reducing the total by 86,000 jobs.
The publication was of decisive importance, as it was the last report before the meeting of the American central bank (Fed), on September 17 and 18.
“Given these data, it appears that the Fed will not have to panic and opt for a large rate cut,” Chris Zaccarelli of Independent Advisor Alliance said in a note.
The same analysis is made by High Frequency Economics, for whom “the economy continues to create jobs, it is not in contraction”, even if “growth seems to be slowing down”, which “does not justify brutal intervention by the monetary authorities”.
Economists were satisfied with the drop in the unemployment rate to 4.2% compared to 4.3% previously.
However, operators have significantly adjusted their expectations and the probability of a half-point cut by the Fed rose to almost 60% for a few minutes, before falling back to 41%.
“I wouldn’t be surprised if it’s a very volatile session,” CFRA’s Sam Stovall warned, as investors try to make sense of Friday’s data.
“There should be a struggle today” between two visions of the economy, according to the analyst, one seeing a worrying deterioration and the other a slowdown to which the Fed will soon provide a solution.
The bond market took the report in stride, with rates recovering after falling sharply ahead of the jobs report.
The yield on 10-year US government bonds even rose to 3.75% against 3.73% the previous day at the close, after having tumbled to 3.65%.
In addition to the relative relief provided by the report, the rate hike also came in a context of stronger-than-expected wage increases (3.8% over one year against 3.7% anticipated).
On the stock market, forecasts deemed disappointing caused Broadcom to be penalized (-9.57%), despite results exceeding expectations.
Wall Street was also concerned about growth of only 5% in microprocessors (the group also sells software), which puts into perspective the dynamics of artificial intelligence (AI) for the group.
The semiconductor sector, which has been battered in recent days, reacted badly to this publication, notably Marvell Technology (-3.51%), Super Micro (-3.53%) and Arm (-2.85%).
Driver assistance software specialist Mobileye (-7.04%) cashed in on information from the Blommberg agency that Intel was considering selling a portion of its stake in the Israeli group.
Intel still owns about 88% of Mobileye, which will go public in New York in October 2022.
Steelmaker US Steel jumped (+6.38%) after the CEO of Cleveland-Cliffs (+0.43%) said on Thursday that he was ready to take over assets from his competitor if the takeover by Nippon Steel did not succeed.