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Stock market news live updates: Stocks dip as traders eye September payrolls miss

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Stocks struggled for direction on Friday as investors digested a key report on the labor market’s recovery, which showed a much weaker-than-expected pace of hiring last month. 

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The S&P 500, Dow and Nasdaq each fluctuated between gains and losses, trading choppily after three consecutive sessions of advances. The moves to the upside earlier this week came after Senate leaders said they reached an agreement on raising the government borrowing limit into early December, helping avert a default as soon as this month. The chamber voted Thursday evening to raise the debt limit by $480 billion, and the legislation for the short-term increase now heads to the House of Representatives. 

With concerns over the government debt ceiling pushed off, investors have fixed their attention toward the latest monthly jobs report from the Labor Department. This report showed another miss on payroll gains after a disappointing August print

Non-farm payrolls rose by only 194,000 in September versus the 500,000 expected. The unemployment rate fell more than expected to 4.8%, though this positive development came alongside a disappointing drop in the labor force participation rate to 61.6%, versus 61.7% in August. And the size of the civilian labor force actually contracted in September, with the gap between the size of the labor force in February 2020 and last month yawning further to top 3 million. 

Average hourly earnings also accelerated to reach a 4.6% year-over-year rate, or the fastest since February, in another print affirming inflationary pressures taking place across the U.S. economy.

“People are more fixated on the jobs created more than anything else. I think the wages are more important for people who are worried about inflation,” Julie Biel, portfolio manager at Kayne Anderson Rudnick, told Yahoo Finance Live on Thursday. “For us, seeing modest wage inflation is a positive because if you think about the U.S. economy, it’s primarily a consumer economy … so it is a positive for the economy longer-term. But it is a negative for profit margins which have been at all-time highs.”

Friday’s jobs report stood in stark contrast to other, stronger-than-expected data on the state of the labor market in the U.S. New weekly jobless claims came in at their second-lowest since March 2020 on Thursday, and ADP’s private payrolls report showed a better-than-expected 568,000 job gains in September earlier this week.

Despite the payrolls miss, the September jobs report may have still been enough to trigger the start of tapering by the Federal Reserve, some economists said. Others, however, said the significant headline payrolls miss may give the central bank pause.

“I think people were counting on [a tapering announcement] being November, and I think now that there’s a percentage chance that it won’t be in November now as a result of this data,” Constance Hunter, KPMG chief economist, told Yahoo Finance Live Friday morning. 

The central bank already signaled last month that it was inclined to remove some of its highly accommodative monetary policies as the recovery made further headway. And Fed Chair Jerome Powell said it would only take a “reasonably good report” for September employment to signal the labor market had reached the Fed’s threshold for tapering.

“There is no other plausible explanation why employers are unable to hire the workers they need: the reason is there is no one out there to hire and the economy is closer to full employment than Washington officials think,” Chris Rupkey, chief economist at FWD Bonds, said in an email Friday morning. “The economy is hot and needs to be cooled down. Don’t be fooled by today’s payroll jobs forecast miss, Fed tapering remains on track for announcement at the upcoming November meeting.” 

9:30 a.m. ET: Stocks mixed after jobs report miss

The three major indexes struggled for direction Friday morning as investors digested the September jobs report, which showed another disappointing print on payroll gains. 

The S&P 500, Dow and Nasdaq were each little changed after the report. Treasury yields rose across the curve, with the 10-year yield adding 2 basis points to near 1.6%. The small-cap Russell 2000 outperformed, adding more than 1.5%. 

Commodity prices extended gains, with U.S. crude oil futures gaining another 1.4% to close in on $80 per barrel. Gold and silver prices each jumped. 

7:12 a.m. ET Friday: Stock futures drift higher ahead of jobs report 

Here’s where markets were trading ahead of the opening bell:

  • S&P 500 futures (ES=F): +2.75 points (+0.06%), to 4,392.75

  • Dow futures (YM=F): +23 points (+0.07%), to 34,661.00

  • Nasdaq futures (NQ=F): +4.25 points (+0.03%) to 14,885.50

  • Crude (CL=F): +$0.56 (+0.72%) to $78.85 a barrel

  • Gold (GC=F): +$2.00 (+0.11%) to $1,761.20 per ounce

  • 10-year Treasury (^TNX): +1.5 bps to yield 1.586%

6:07 p.m. ET Thursday: Stock futures extend earlier gains

Here’s where markets were trading Thursday evening:

  • S&P 500 futures (ES=F): +3.25 points (+0.07%), to 4,393.25

  • Dow futures (YM=F): +23 points (+0.07%), to 34,661.00

  • Nasdaq futures (NQ=F): +17.50 points (+0.12%) to 14,898.75

© Provided by Yahoo! Finance NEW YORK, NEW YORK – SEPTEMBER 30: Traders work on the floor of the New York Stock Exchange (NYSE) on September 30, 2021 in New York City. In afternoon trading the Dow was down over 250 points as investors continue to worry about inflation, wages and supply chain issues. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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