US Stock Market Faces Test as Jobs Report and Inflation Data Loom

The US stock market is poised for a significant test as investors await crucial reports on employment and inflation, which will determine the trajectory of interest rate hikes.

The monthly jobs report, due on October 2, is expected to show growth of 100,000 jobs and an unemployment rate of 4.2%, according to a Reuters poll of economists.

A key inflation gauge, the personal consumption expenditures price index (PCE), will also be released on Wednesday, offering insight into inflation trends.

Investors are scanning for implications for the Federal Reserve, which raised interest rates by a quarter percentage point on September 16 and signaled it would raise again before the year is out.