US stocks weakened today as investors await new data on the US economy. The Dow Jones index, which includes shares of thirty leading US companies, lost 0.11 per cent today to end trading at 36,204.44 points. The broader S&P 500 index fell 0.54 per cent to 4,569.78 points and the Nasdaq Composite index, which includes many companies in the high-tech sector, fell 0.84 per cent to 14,185.49 points.
Investors Anticipate US Jobs Report Impact on Markets
Investors’ attention is mainly on Friday’s report on November’s job creation and unemployment rate in the US. The latter could alter expectations that the Fed intends to start cutting interest rates soon, according to Reuters. Stocks of large technology companies, which are usually very sensitive to interest rate developments, contributed significantly to today’s stock market decline.
Shares in the technology company Apple, for example, have weakened by almost one per cent today, and shares in the software firm Microsoft have fallen by around 1.4 per cent. However, shares of alternative taxi operator Uber Technologies gained more than two per cent. They were reacting to Friday’s announcement that Uber will join the S&P 500 index this month, Reuters reports.
Currency Market Trends Amid Fed Speculations
In the foreign exchange market, the US dollar strengthened today. It erased some of its earlier losses caused by bets that the Fed will start cutting interest rates soon. The euro was down nearly half a percent against the dollar at around 22:00 CET, hovering near $1.0835.
Fed Chief Powell’s Assessment and Caution
Fed chief Jerome Powell said on Friday that interest rates are now at a very restrictive level, slowing inflation. However, he warned that the Fed was prepared to move to further tighten monetary policy if necessary.
The Fed started raising interest rates last March to bring inflation under control. Its key rate has risen by more than five percentage points since then. The last time the Fed raised interest rates was in July. The base rate is now in a range of 5.25 to 5.50 percent, the highest level since 2001.
The euro strengthened by around three per cent against the dollar in November, helped by speculation of an imminent US interest rate cut. During November, it rose to above USD 1.1, its highest level since August. “November was a very weak month for the dollar, partly because of the Fed’s expected monetary easing,” said analyst Colin Asher of Mizuho. “We see some room for a turnaround at the end of the year,” he added.