US Stocks Decline as Traders Assess Weak Jobs Data Prior to Friday Employment Report

According to Yahoo News, US stocks closed lower on Wednesday as investors assessed weak private payrolls data and anticipated the November jobs report, set to be released this Friday. Bond yields dropped as investors factored in lower interest rates due to data indicating a potential economic softening and the possibility of the Federal Reserve cutting interest rates soon. Oil prices plummeted as the US experienced an increase in gas inventories compared to the previous week, with US oil prices closing below $70 a barrel for the first time since June. Brent crude, the international benchmark, fell 4% to trade around $74.32 a barrel. Private companies hired fewer employees than expected in November, adding 103,000 jobs, according to ADP. This is lower than the anticipated 128,000, suggesting that the labor market may be cooling and providing the Fed with a reason to reduce interest rate hikes in the economy. Comerica Bank forecasts that payrolls will decrease to 110,000 in the government's November jobs report, while unemployment will rise to 4%. Markets also remain hopeful about the prospect of Fed rate cuts in 2024. Investors are pricing in a 60% chance the Fed could reduce interest rates by March of next year, according to the CME FedWatch tool. Meanwhile, the yield on the 10-year Treasury eased four basis points, trading around 4.12% Wednesday afternoon.