Wall Street’s main indexes opened lower today as investors weighed up data showing a pick up in jobs growth for cues on the trajectory of inflation.
The Dow Jones Industrial Average fell 0.7 per cent at the open, while the Nasdaq Composite shed 1.3 per cent.
Meanwhile, the S&P 500 dropped 0.8 per cent to slow down its recovery from a four per cent pullback in May on fears of rising prices.
US private payrolls increased by a better-than-expected 978,000 in May, setting an upbeat tone for the closely watched jobs report on Friday.
A separate report indicated the number of Americans filing new claims for unemployment hit its lowest level since the start of the pandemic.
“The US economy will continue to rebound and that might lead to some inflation worries in the long-term, but we remain largely constructive on the near to medium term inflation outlook,” said Jon Adams, senior investment strategist at BMO Global Asset Management.
London’s FTSE 100 sunk today as energy firm National Grid dragged the index lower to break a three-day winning streak.
The blue-chip index fell by 0.8 per cent during the afternoon, with B&M falling 4.1 per cent after the discounter forecast trading to remain volatile this year.
The fall came after the UK’s service industry saw business activity grow at its fastest rate in 24 years last month as the economic reopening continued apace.
Meanwhile, the mid-cap FTSE 250 also dropped 0.5 per cent to ease from a record high scaled in the previous session.
The fall came as Workspace Group dropped 3.2 per cent after the office-space provider slipped into its first annual loss in 12 years.
The afternoon’s biggest winner was betting firm Entain, who rose 2.1 per cent, followed by Phoenix Group, up by 1.4 per cent.
Standard Life Aberdeen and Rightmove also rose 0.8 per cent and 0.7 per cent respectively.
Fresnillo was the afternoon’s biggest faller, dropping 4.9 per cent, followed by Melrose Industries, down 4.3 per cent.
Meanwhile, BT and credit checker Experian both dipped by 2.8 per cent and 2.2 per cent respectively.
Around the world
Asian shares retreated from three-month highs today as investors weighed inflation concerns ahead of key US economic data.
MSCI’s broadest index of Asia-Pacific shares outside Japan were up at 709.1 points, after reaching as high as 712.57 yesterday, a level not seen since early March.
Japan’s Nikkei added 0.4 per cent, while Australian shares climbed to all-time highs as investors cheered stronger-than-expected economic growth data.
While stock markets close in on record highs, the momentum seen earlier in the year has faded as investors worry a Covid rebound could mean higher inflation and monetary policy tightening.
“Increases in inflation expectations have coincided with equities performing well recently,” said Oliver Jones, senior markets analyst at Capital Economics.
“In general, we suspect that these conditions will remain in place for a while longer.”