A bloody day on Wall Street as all eyes are on the official employment data

North American stock markets closed with losses, on a day investors took for granted that the United States Federal Reserve (Fed) would continue to raise interest rates – as already expected – and may go further than initially expected. But despite ending the day lower, indices on the other side of the Atlantic managed to regain some of their gains, dropping more than 2% in value for the day.

The benchmark S&P 500 lost 0.79% 4,411.59 point, the Dow Jones Industrial Average fell 1.07% to 33,922.26 points, and the Nasdaq Technology Index fell 0.82% to 13679.04 points.

A red tide began in the markets after ADP reported that US private sector companies created nearly half a million jobs in June – the highest number in more than a year. This labor market strength has given strength to expectations that the US Federal Reserve (Fed) will maintain a more restrictive monetary policy, eliminating the possibility of easing later this year.

And if the prospect of tighter monetary policy has benefited bonds or the US currency at other times, the scenario was different on Thursday, as investors also flee US debt. In the case of short-term debt, interest rates are even higher than in long-term debt — which usually means that investors see the risk of a recession in the next couple of years.

US two-year yields rose 4.9 basis points to 4.993%, while 10-year yields rose 10.8 basis points to 4.039%.

Investors are now awaiting the release of official employment data in the United States, on Friday, which includes not only the private sector, but also the public sector.