US Nonfarm Payroll Data to Be Released Tonight, US Stocks May Experience Significant Volatility

According to a report by Jinse Finance, a simulation conducted by a trading department at a certain exchange indicates that if Thursday’s employment data mirrors the recent weakness seen in the ADP report, the US stock market is likely to experience significant sell-offs. The exchange outlined market reactions under different scenarios: if new jobs number between 85,000 and 105,000, the S&P 500 Index may decline by 0.25% to 1.5%; if the figure falls below 85,000, the S&P 500 Index could plunge by 2% to 3%. The report warns, “In the worst-case scenario, the market will face the risk of stagflation (sluggish economic growth accompanied by high inflation), at which point both fiscal and monetary policies may prove ineffective.” The report specifically notes, “As long as nonfarm payrolls exceed 100,000, the stock market will continue to find support.” Of course, employment data has previously exceeded expectations, and such an outcome could occur again. The exchange forecasts that if new jobs number between 125,000 and 145,000, the S&P 500 Index may rise by 0.75% to 1.25%; if the figure exceeds 145,000, the S&P 500 Index could see gains expand to 1% to 1.5%.