US: Wall Street stocks tick down ahead of key jobs report

US STOCKS closed slightly lower on Thursday (Oct 5) as traders braced for key employment data likely to have a bearing on the future path of interest rates.

The Dow Jones Industrial Average finished the day flat at 33,119.57, reversing declines in the middle of the day.

The broad-based S&P 500 closed down 0.1 per cent at 4,258.19, as did the tech-rich Nasdaq Composite Index, which fell to 13,219.83.

When the Federal Reserve raises interest rates, as it has been doing since March 2022 in a bid to lower stubborn inflation, the labour market usually cools.

But despite an aggressive campaign of Fed rate hikes, the labour market has remained resilient with the unemployment rate close to historic lows.

While this is good news for individuals, it means interest rates will likely need to stay higher for longer, which impacts the price people are prepared to pay for stocks on Wall Street.

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“If there’s any signs of the labour market cracking then that would obviously be positive and maybe could send stocks a little bit higher,” Peter Cardillo from Spartan Capital told AFP.

Among individual stocks, consumer goods companies saw a decline, with PepsiCo shares down by 5.2 per cent and Molson Coors slipping 6.3 per cent.

There was some bad news in the mortgage markets, where the popular 30-year fixed rate home loan reached a weekly average of 7.49 per cent – a new 23-year high – on a recent surge in bond yields, according to data from Freddie Mac. AFP