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11 Oct 2021
3 min read

US Stocks Slide After Weakest Jobs Report of the Year

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Key Takeaways

  • Stocks on Wall Street declined on Friday but remained in the green for the week
  • The labor market grew by 194,000 new jobs in September, the slowest pace for the year

What’s on Focus in the Markets?

Stocks on Wall Street declined broadly on Friday as investors digested the latest non-farm payrolls report. The highlight of the week, the jobs data for September, largely surprised the market. In more detail, the US economy added 194,000 new jobs in September, the slowest pace of jobs growth this year.

To dive deeper, the report knocked the three major US indexes, increased the volatility in gold prices, and rattled the US dollar.

First, the Dow Jones Industrial Average hovered near the flatline on Friday and dipped right under it to close 8 points lower. In addition, the S&P500 and the Nasdaq Composite lost 0.2%, and 0.5%, respectively.

Second, the price of gold spiked $27, or 1.6% to a session high of $1,781 per troy ounce. Later, however, the precious metal erased the gains and finished the day higher by just $1 on Friday. And third, the US dollar was shaken at the release of the report as traders struggled to interpret the data.

What’s the Latest News on Bitcoin?

In the meantime, the price of bitcoin fluctuated largely unchanged over the weekend. In other words, the original cryptocurrency remained pinned near $55,000 a coin. It did, however, spike to its recent highs, reaching a peak of $56,000 on Sunday afternoon.

Cryptocurrencies have enjoyed solid tailwinds this month. After the Securities and Exchange Commission said it will work toward crypto-friendly regulations, fears in the market have largely eased. Additionally, crypto traders relaxed further when the Treasury and the Federal Reserve said they have no plans to ban bitcoin.

To kickstart the trading week on Monday, bitcoin broke above $56,000 and reached a session high of $56,700 per coin.

What’s Next for Traders and Investors?

Inflation, monetary policy changes, and political uncertainty are the main themes in the market this month. On the inflation front, consumer price data for the US will be closely monitored by traders and investors on Wednesday.

On the topic of monetary policy changes, the US Federal Reserve is expected to introduce a shift in its pace of monthly bond-buying. That would mean the US central bank is aiming to reduce its $120bn in monthly asset purchases. The step is necessary to cool down inflation as the US economy is now healthy enough to keep going without extraordinary cash injections.

With that in mind, market participants will be watching the Fed’s minutes from the last policy meeting. Slated for Wednesday, the meeting summary will reveal what Fed officials discussed during their gathering near the end of September.

In other news, the US Senate approved a bill that made sure the Treasury will avoid a default at least until December. The bill is now headed to the House where it will be discussed early this week.

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