Strong Employment Data and Rising Oil Prices Pressure Markets
The U.S. markets closed for Labor Day on Monday, but the impact of strong employment data and rising oil prices is still being felt. The non-farm payrolls added 162,000 jobs in August, exceeding market expectations and pushing the probability of a Fed rate hike in September to 58% from 49%. This has put pressure on tech giants, with all three major indices closing lower last Friday.
Traders are now closely monitoring inflation trends, particularly core CPI data, which will be released on Thursday and Friday. If core CPI exceeds 0.3%, Federal Reserve Governor Waller would consider a rate hike. Bank of America forecasts core CPI at 0.22% month-over-month, but Citigroup expects only 0.184%.
Meanwhile, oil prices have risen due to the escalating situation in the Middle East, with Brent crude futures reaching around $93 and WTI crude futures climbing approximately 0.99%. The situation has also eroded Trump's approval ratings and the Republican Party's prospects in the midterm elections.