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Investing.com — Thursday’s market action demonstrated the well-known habit of stocks reacting to even the mildest comments from Federal Reserve policy makers.
Fed Chairman Jerome Powell said the central bank would keep buying bonds at its current pace despite the “notable” rise in U.S. interest rates, shrugging off the notion that inflation would spiral out of control.
He has said this before, but investors are becoming increasingly worried about rising rates, so repeating the same mantra only added to investor jitters.
Nasdaq has now given up its gains for the year as growth stocks fall out of favor.
Here are three things that could affect trading tomorrow:
1. Jobs number
The government’s tally of new non-farm jobs added for February is expected to be released at 8:30 AM ET (1330 GMT) on Friday. Analysts are expecting a reading of 182,000, up from the 49,000 reported for January.
Job numbers are an important barometer of the recovering economy. The number of people who applied for jobless benefits last week remained at an elevated level but were slightly below expectations.
2. Tech stocks
As tech stocks sank on Thursday, Reuters calculated that the NASDAQ Composite had wiped out all of its gains this year, falling about 10% from its record high on Feb. 12. That would put the tech-heavy index in a correction.
With interest rates rising, it seems investors were thinking twice about owning richly valued names like Tesla Inc (NASDAQ:TSLA), which is now 30% lower than its record high earlier this year. But in previous sell-offs, we’ve seen investors swoop in to buy the dip. Friday will show us whether that pattern holds true this time or whether a true rotation from growth to value stocks is taking place.
3. Biden stimulus
The Senate voted to consider President Joe Biden’s $1.9 trillion stimulus, but it’s not going to be an easy slam dunk. Reuters reported the vote along party lines, 51 to 50, with Vice President Kamala Harris breaking the tie.
A final vote could come over the weekend, though Republicans could try to stall the movement of the bill with procedural matters. Democrats said they would send more aid to smaller U.S. states to make sure they won unanimous party support.
