Market Volatility Rises as Rate Hike Looms Amid Strong Employment Data
Wall Street analysts are revisiting their research calls as the market braces for a potential rate hike. The Federal Reserve is likely to raise the funds rate by 25 basis points at its next meeting, thanks in part to the strong employment data released last week. The August nonfarm payrolls surged 162,000 versus a 55,000 consensus, sending shockwaves through the market.
The tech-heavy Nasdaq and Dow Jones Industrials closed lower on Friday, with only the small-cap-heavy Russell 2000 ending higher. The S&P 500 also declined, closing at 7,718. Meanwhile, Treasury yields rose modestly across the board after the strong employment data, with the 30-year bond trading at 5.25% and the benchmark 10-year note at 4.79%. With vacationing traders returning, volatility is expected to increase ahead of and after this week's inflation data.
On Tuesday, several analysts released new research calls. Intel was upgraded to Outperform from Market Perform at Northland, with a $120 target price. Lockheed Martin was also upgraded to Buy from Hold at UBS, with a $674 target price. However, Amgen was downgraded to Market Perform from Outperform at BMO Capital, with a $450 target price.