Stock Market Today: Dow Slips Back From Record Highs Ahead of Key

Markets could use the U.S. jobs report Friday as a catalyst—especially in the wake of the Federal Reserve announcing an end to its bond-buying program but noting that it was keeping a close eye on the labor market. Wall Street is expecting around 450,000 nonfarm payrolls jobs to have been added in October.

“If realized, that +400k number would be the strongest jobs growth in three months. We’ve had some fairly positive labor market data in advance of the jobs report too,” said Jim Reid. a strategist at Deutsche Bank. The ADP report of private payrolls Wednesday and Thursday’s weekly initial jobless claims for the week of Oct. 30 both exceeded expectations of labor market strength.

“The Fed made it clear this week that labor market evolution after the Delta variant will be a key determinant in the future path of monetary policy,” Reid added.

Markets have taken in stride the decision this week by the Fed to begin slowing, or tapering, its Covid-19 pandemic-era program of monthly bond purchases, which adds liquidity to markets. The Fed said Wednesday that it would taper its $120 billion monthly purchases by $15 billion each month, starting in November, with a view to ending the program of quantitative easing in June 2022.

With fears surrounding inflation and economic growth still on investors’ radar, Fed Chair Jerome Powell also signaled that the central bank’s tapering would be sensitive to economic conditions, particularly the job market.

“While elevated inflation has prompted concerns of premature tightening that chokes off growth, the Fed’s patience should allay those fears,” said Mark Haefele, the chief investment officer at UBS Global Wealth Management. “A sharp rise in yields and a tightening in financial conditions sufficient to unsettle markets still look unlikely.”

Overseas, the pan-European

Stoxx 600
was 0.4% higher. Hong Kong’s

Hang Seng Index
declined 1.6%.

Hong Kong trading was hit by…