Dow futures fall more than 200 points as strong jobs data points to more Fed tightening

Futures tied to the $Dow Jones Industrial Average(.DJI.US)$ lost 256 points, or 0.7%. $S&P 500 Index(.SPX.US)$ and $Invesco QQQ Trust(QQQ.US)$ Nasdaq-100 futures fell 0.8% and 0.9%, respectively.
Private sector jobs increased by 497,000 in June, according to data from payroll processing firm ADP. That’s more than double the 220,000 Dow Jones consensus estimate and also far better than the downwardly revised 267,000 gain seen in May. June saw the biggest monthly increase since July 2022.
The ADP data, which is often unreliable and more volatile than other jobs data, comes ahead of Friday’s official June payrolls report. Economists are expecting 240,000 non-farm payrolls were added last month, a slowing from the 339,000 jobs added in May, according to Dow Jones. However, traders may now be expecting a hotter number that leads to the Fed resuming its hiking campaign this month after a pause. The central bank next decides on interest rates on July 26.
$JetBlue Airways(JBLU.US)$ slipped more than 1% in the premarket after the company announced it would end its partnership in the northeast U.S. with $American Airlines(AAL.US)$ to focus on Spirit Airlines. American shares moved nearly 1% lower, while Spirit added more than 2%.
The shortened trading week resumed Wednesday for a losing session after a break for the Fourth of July holiday. The major indexes logged modest losses. Wall Street combed through minutes from June’s Federal Reserve policy meeting, which showed that most officials would support more increases ahead.
Traders are pricing in a nearly 89% chance of a hike at the central bank’s meeting this month, according to CME Group’s FedWatch tool.
“Fed chair Powell has made it clear that he is absolutely committed to seeing this 2% target reached, and so, I think it pretty much means that it’s a when, not an if, as far as additional hikes are concerned later this year,” CIC Wealth’s Malcolm Ethridge said . $SPDR S&P 500 ETF(SPY.US)$ $Nasdaq Composite Index(.IXIC.US)$