New York Stock Market Starts Higher Awaiting Employment Report

Major indices on the U.S. New York Stock Exchange opened higher on the 9th (local time) as investors awaited the February employment report to be released the following day. Amid ongoing concerns about tightening, the weekly initial jobless claims released before the market opened exceeded expectations, easing investor sentiment.

As of 10 a.m. at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average was up 130.47 points (0.40%) from the previous close, trading around the 32,928 level. The S&P 500, which is centered on large-cap stocks, rose 19.04 points (0.48%) to around 4,011, while the tech-heavy Nasdaq index was up 70 points (0.60%) at approximately 11,646.

Within the S&P 500, 10 sectors excluding financial stocks showed gains. Among individual stocks, Silvergate Capital was trading more than 30% lower following the announcement of the liquidation of its subsidiary, Silvergate Bank. Etsy saw a 4% drop after Jefferies downgraded its investment rating. MongoDB fell nearly 7% despite better-than-expected earnings, as disappointment over future guidance spread.

[Image source=Reuters Yonhap News]

Investors are digesting the hawkish remarks (preference for monetary tightening) made by Federal Reserve Chair Jerome Powell over two days this week and are now awaiting the employment report.

The weekly initial jobless claims released this morning hit the highest level in 10 weeks, raising expectations of a slowdown in the labor market. According to the U.S. Department of Labor, new jobless claims for the week ending March 4 (February 26?March 4) increased by 21,000 to 211,000, surpassing the market forecast of 195,000. This is the highest level in 10 weeks since December 24 of last year. It is also the first time in 8 weeks that weekly claims have exceeded 200,000. The increase in claims is interpreted as a result of layoffs that have continued since the end of last year, especially in the tech sector.

However, local media assessed that the claims level itself remains low compared to historical standards. The ADP private employment data released the previous day also suggests that the U.S. labor market remains robust, drawing more market attention to the February employment report to be announced the next day. Currently, Wall Street expects nonfarm payrolls to increase by 225,000 in February, with the unemployment rate at 3.4%. Alex Saunders of Citi stated, "Strong employment is bad news for the market," adding, "It will increase stock selling pressure and support the Fed's large rate hikes."

According to the CME FedWatch tool, the federal funds (FF) futures market still reflects over a 70% chance of a big step (a 0.5 percentage point increase in the benchmark interest rate) in March. Just a week ago, this figure was in the 31% range, but hawkish remarks from Chair Powell over the past two days, such as "the terminal rate could be higher" and "we are ready to speed up rate hikes," have caused this probability to surge sharply.

Today, Federal Reserve Vice Chair Michael Barr will also deliver a speech on virtual assets. Following the liquidation of Silvergate Bank, major cryptocurrencies such as Bitcoin and Ethereum are down about 1%.

In the New York bond market, Treasury yields are showing signs of stabilization. The 2-year U.S. Treasury yield, sensitive to monetary policy, is trading around 4.96%, while the 10-year yield is near 3.94%. The dollar index, which measures the value of the dollar against six major currencies, is down about 0.4% from the previous close, standing at approximately 105.2.

European stock markets are mixed. Germany's DAX index is up 0.19% from the previous close, while the UK's FTSE index is down 0.47%. France's CAC index is trading about 0.07% higher.