Stocks are falling today after reports suggested the U.S. job market remains much more resilient than expected, the Associated Press reports.
The S&P 500 was 1.3% lower in morning trading. The Dow Jones Industrial Average was down 491 points, or 1.4%, at 33,796 as of 10:57 a.m. Eastern time. The Nasdaq composite was 1.5% lower.
A report from ADP Research Institute suggested hiring by private employers was much stronger last month than economists expected, with nearly twice as many jobs created than forecast. While a sturdy labor market keeps the economy out of a long-feared recession, it could also push the Federal Reserve to keep interest rates higher for longer in its campaign to defeat high inflation.
The ADP report was paired with a separate report showing the number of U.S. workers applying for unemployment last week remains historically low, even if it was a bit higher than expected.
A report from the Institute for Supply Management said growth in U.S. service industries remains accelerated in June. On the plus side for investors, it also showed prices paid by service companies are growing at a slower rate, which could be an encouraging signal for inflation.
On Wall Street, bank stocks slid to some of the sharpest losses amid worries about higher interest rates. Comerica dropped 5%, PacWest Bancorp slid 8.2%, and KeyCorp fell 3.8%.
Big tech stocks also tend to be some of the hardest hit by high interest rates, along with other high-growth stocks. A 1.7% drop for Amazon and 2.6% fall for Tesla were two of the heaviest weights on the S&P 500.
JetBlue Airways tumbled 6.5% after it said it will end a partnership with American Airlines in the northeastern United States after losing a court fight over the deal, as it focuses instead on salvaging its proposed purchase of Spirit Airlines. American Airlines fell 3.1%.
Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, was an outlier. It added 0.3% after unveiling its new app Threads, a rival to Twitter.
