ADP Shows Labour Resilience – US Market Wrap

Treasuries slid and the US dollar climbed after stronger-than-expected jobs numbers dampened Wall Street’s confidence that the Federal Reserve’s next interest-rate cut would be a big one.

Ten-year yields closed in on 3.8% after hitting a low of 3.69% in the prior session amid a flare-up of tensions in the Middle East. The dollar reached nearly a two-week high after the labor readout as traders pondered the scope of the Fed’s next move.

Data Wednesday showed US companies added more jobs than expected last month, at odds with other indicators that show a cooling labor market. Friday’s Nonfarm Payrolls numbers will be the next critical check on the health of the US economy.

That left stocks struggling to buck the last of Tuesday’s risk-off mood as updates from the Mideast slowed. The S&P 500 ended the day little changed while the Nasdaq 100 rose 0.1% as traders balanced the data against disruptions from a dockworkers’ strike at key US ports and the destruction of Hurricane Helene.

Traders are hoping tensions in the Middle East will fade into the background – much as they did in April – even after Israel vowed to retaliate against a missile barrage from Iran. President Joe Biden urged Israel to hold off from attacking Iran’s nuclear facilities. Early gains for oil were trimmed by an unexpected rise in US inventories that counterbalanced the unrest. WTI crude traded around $71 a barrel.