The Dow dropped 260 points because the jobs report came in strong. Strong jobs mean the Fed might raise rates. Raising rates means stocks go down. This is called economics.
Every single person who bought calls on Thursday knew the jobs report was Friday. They knew it. They looked at their trading calendar. They saw the little briefcase icon next to August NFP. They clicked buy anyway.
The "hotter-than-expected" payrolls reading sent traders into a panic because apparently nobody expected people to have jobs in August. What did they think was happening? That everyone just stopped working in July and started trading crypto full-time? The unemployment rate is 3.8 percent. It's been hovering there for months. This is not new information.
Rate hike fears are back. They left for maybe three weeks in July when everyone convinced themselves the Fed was done. The Fed said they weren't done. They said it in plain English at the press conference. They said it in the meeting minutes. They might as well have skywritten it over lower Manhattan. But sure, let's act surprised when strong economic data suggests they meant what they said.
Retail traders are now refreshing their brokerage apps wondering why the line went down after they bought the top of a rallye based on vibes and a TikTok they saw from a guy whose bio says "not financial advice." The same guys who thought Jackson Hole was a Wyoming strip club are now parsing FOMC dot plots like they're the Rosetta Stone.
The Fed meets in two weeks. They'll either raise rates or they won't. The market will either go up or down. And thousands of amateur technicians will draw lines on charts explaining why they totally saw it coming the whole time.
Photo by Nathan Sack on Unsplash
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