3 days ago
US Markets Close for Labor Day Before Crucial Fed Week
US stock markets are closed because the country is celebrating Labor Day.
This holiday honors workers and the American labor movement.
Trading is expected to start again on Tuesday morning.
Investors are preparing for an important week of economic reports.
The reports will show whether prices are still rising quickly.
A strong jobs report has made some investors think the Federal Reserve may raise interest rates.
Higher rates can make borrowing more expensive and may hurt some companies’ stock prices.
The Federal Reserve’s decision will depend partly on the new inflation data.
The New York Stock Exchange, Nasdaq, and US bond markets are closed Monday, September 7, for Labor Day.
Trading is scheduled to resume Tuesday, September 8, at 9:30 a.m. Eastern Time.
Investors will focus on August producer and consumer inflation data due Thursday and Friday.
A stronger-than-expected August jobs report increased expectations of a possible Federal Reserve rate hike on September 16.
Treasury yields near 4.8% and elevated borrowing costs could pressure equities, especially high-valuation stocks.
- Who
- The New York Stock Exchange, Nasdaq, investors, the Federal Reserve, and US economic officials are involved.
- What
- US stock and bond markets are closed for Labor Day as investors await inflation data and the Federal Reserve’s next interest-rate decision.
- Where
- The closure affects US financial markets, including the New York Stock Exchange, Nasdaq, and the Treasury market.
- When
- Markets are closed Monday, September 7, and are scheduled to reopen Tuesday, September 8, at 9:30 a.m. Eastern Time; the Federal Reserve meeting is scheduled for September 16.
- Why
- Labor Day is a US federal holiday, while the week’s inflation data could influence whether the Federal Reserve raises interest rates.
Case for tighter policy
Case for unchanged or lower rates
September interest-rate decision
Case for tighter policy
The stronger-than-expected August jobs report increased expectations that the Federal Reserve may raise rates by 25 basis points on September 16.
Case for unchanged or lower rates
Federal Reserve Governor Christopher Waller has said he could support leaving rates unchanged if inflation continues to moderate, while President Donald Trump has called for lower interest rates.
Impact of higher Treasury yields
Case for tighter policy
Higher yields may be needed to respond to persistent inflation concerns and strong employment conditions.
Case for unchanged or lower rates
A sustained move above 4.8% could create problems for other asset classes, increase borrowing costs, and pressure high-valuation stocks, according to strategist Matt Maley.
Key facts
- Market closure
- The New York Stock Exchange, Nasdaq, and US bond markets are closed Monday, September 7.
- reopening time
- Trading is scheduled to resume Tuesday, September 8, at 9:30 a.m. Eastern Time.
- Jobs report
- August payrolls rose by 162,000, while the unemployment rate remained 4.1%.
- Inflation data
- August Producer Price Index data are due Thursday, followed by Consumer Price Index data Friday.
- Rate-hike odds
- Markets were pricing roughly a 58–59% probability of a 25-basis-point increase at the September 16 Federal Reserve meeting.
- Recent performance
- The Dow fell 0.51%, the S&P 500 declined 0.38%, and the Nasdaq Composite fell 0.29% over the previous week.
- Treasury yield level
- Treasury yields face a key test around 4.8%, according to the report.
Quotes
Matt Maley
Chief market strategist at Miller Tabak + Co.
“We remain concerned about the Treasury market…as rising fiscal deficits, massive debt issuance, and heavy corporate borrowing continue to pressure long-term yields... while Treasury Department jawboning has failed to produce the desired decline in rates (at least so far)”
CNBC TV 18
Sources
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