U.S. equity markets were lower Thursday as traders digested strong employment data and what that might mean for future inflation and potential action by the Federal Reserve.
The Dow Jones Industrial Average fell 23 points, or 0.07%, while the S&P 500 and the Nasdaq Composite were lower by 0.36% and 1.03%, respectively.
The early selling comes after weekly jobless claims fell to a pandemic low and private-payroll job growth surged past expectations.
Data released Thursday showed 385,00 Americans filed for first-time jobless benefits in the week ended May 29, the lowest amount since the pandemic began in March 2020. Separately, the ADP National Employment Report found private-sector payrolls grew by 978,000 workers last month. The reports, which both topped Wall Street's expectations, have investors assessing the impact strong job gains could have on already worrisome inflation readings. The May nonfarm payroll report is scheduled to be released on Friday morning.
"The multitrillion-dollar question is the future fate of inflation," said Mark Hamrick, senior economic analyst at Bankrate.com. "The status of wage gains will be something to watch in the coming months as the Federal Reserve prepares to signal that it will eventually dial back on asset purchases as a prelude to a hike in interest rates, the timing of which remains uncertain."
In stocks, AMC Entertainment Holdings Inc. fell 18% after the movie-theater operator said it sold 11.5 million shares of common stock at the average price of $50.85 per share at an at-the-market equity program that the company announced Thursday morning. The transaction raised $587.4 million in new capital and comes after the stock soared 95% Wednesday despite hedge fund Mudrick Capital flipping the shares it had acquired in an offering the previous day. AMC shares have gained 418% over the past seven trading sessions through Wednesday.
Other so-called meme stocks, including GameStop Corp., Bed Bath & Beyond Inc. and Koss Corp. were also under pressure.
Elsewhere, activist investor Engine No. 1 secured a third seat on ExxonMobil Corp.’s board of directors on Wednesday. The investment firm has taken aim at the oil giant over concerns about how it plans to combat global warming.
Meanwhile, Merck & Co. completed the spinoff of Organon & Co., which will trade on the New York Stock Exchange under the ticker OGN.
In earnings, J.M. Smucker Co. reported earnings and revenue that topped Wall Street estimates, boosted by strong demand for at-home food and coffee products, but both figures were below year-ago levels. Full-year guidance was ahead of expectations.
In commodities, West Texas Intermediate crude oil was unchanged at $68.83 per barrel and gold lost $35.60 to $1,874.30 an ounce.
Overseas markets were mixed.
Germany’s DAX 30, outperformed in Europe, advancing 0.19% while France's CAC 30 and Britain’s FTSE 100 slid 0.21% and 0.61%, respectively.
In Asia, Japan’s Nikkei 225 rose 0.39% while China’s Shanghai Composite and Hong Kong’s Hang Seng index slipped 0.36% and 1.13%, respectively.