Key Takeaways

  • Concerns raised among investors as unexpected jobs numbers shake the market
  • The S&P 500 and the Dow Jones dropped 1.4% and 1.3% respectively. The Nasdaq Composite fell 1.9%

JOLTS Jitters

The S&P 500 took a dive Tuesday, closing at its lowest level since June. The 1.4% drop came as the Bureau of Labor Statistics reported yesterday an estimated 9.6 million job openings posted in August. 

The unexpected rise was well above analysts’ estimates of 8.8 million. The JOLTS (Job Openings and Labor Turnover Survey) hit some investors hard, suggesting that the Federal Reserve may need to keep interest rates higher for longer, as the results may be signaling an overheating economy. 

What’s more, market watchers have been keeping a keen eye on the 10-year Treasury yields, as they hit highs not seen since 2007. This rise may be fueling fears of an oncoming recession, as the Treasury yields are one of the gauges used when shaping mortgage rates. 

On Tuesday, the average mortgage interest rate rose to 7.72%, the highest since 2000. If Treasury yields continue to rise, this number may cross the 8% mark. With an alarmingly high-interest rate, fears of the housing market going stagnant hang heavy in the air. 

The S&P 500 wasn’t the only casualty of yesterday’s news. By the end of the session, the Dow Jones Industrial Average fell by 1.3%, its lowest close since June. The Nasdaq Composite felt the worst of the hit, plummeting 1.9%.

Time Will Tell

The jobs numbers report will provide a more comprehensive overview of employment data. Due Friday, September’s nonfarm payrolls report, released from the Bureau of Labor Statistics, is expected to show employers added 163,000 Americans to the workforce. Further, Experts are forecasting a 0.1% drop in unemployment levels, down to 3.7% from 3.8%. 

As always, traders should observe the outcome of the jobs report. Any unexpected figure has the potential to cause market volatility. Make sure to manage your risk effectively with tools such as stop-loss orders.

Interestingly, the stock market taking a battering comes in sharp contrast to the crypto world enjoying “Uptober”, where Bitcoin prices have risen at least 3% in the last 5 days.