(Bloomberg) — Stocks whipsawed ahead of US jobs data that will be key in determining the size of a Federal Reserve rate cut in September.
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In a session of several twists and turns, the S&P 500 finished lower. That’s despite a rally in a handful of big techs. Treasury yields fell slightly, with traders still pricing in over 100 basis points in Fed easing this year — which implies a potential super-sized reduction. Given Jerome Powell’s recent emphasis on the labor market, many on Wall Street say Friday’s US payrolls will dictate whether the Fed cuts by 25 or 50 basis points this month.
To Steve Sosnick at Interactive Brokers, a “Goldilocks” scenario around consensus – ‘not too hot, not too cold’ – is what equity bulls require.
“The danger in really ‘bad news’ is that even if the Fed is prepared to react aggressively, it might be too late to stave off real economic weakness,” he said….
