The number of job openings surged to 9.6 million in August.

Key points:

• The number of job openings in the JOLTs report rose from 8.8 million in July to 9.6 million in August.
• The IPD/TIPP Economic Optimism index fell from 43.2 in August to 36.3 in September.
• There was a testing of new highs for the U.S. Dollar Index.  

On October 3, the U.S. released the JOLTs Job Openings report for August, revealing that the number of job openings surged to 9.6 million in August, surpassing the analyst consensus of 8.8 million.

The most significant growth was witnessed in professional and business services (+509,000), followed by finance and insurance (+96,000), state and local government education (+76,000), nondurable goods manufacturing (+59,000), and federal government (+31,000).

This unexpected surge in job openings has greatly surpassed analyst predictions, leading to a spike in Treasury yields. The FedWatch Tool suggests a 37.6% probability of a 25 bps federal funds rate hike in December, but market sentiment indicates a widely expected rate hike.

Additionally, the IBD/TIPP Economic Optimism index report, which traders reviewed today, exhibited a decline in Economic Optimism from 43.2 in September to 36.3 in October, falling short of the analyst consensus of 41.6.

Following the release of the JOLTs Job Openings report, the U.S. Dollar Index reached new highs, with traders focusing on the escalating Treasury yields. The robust job market has presented a challenge for the Fed, as increasing wages are fueling inflation. However, the U.S. Dollar Index has gradually retraced from its session highs as traders have opted to secure profits near multi-month highs.

Gold settled near the $1825 level amidst continued pullback, influenced by the strong jobs data, which is bearish for gold. Nonetheless, it's worth noting that gold is oversold, increasing the potential for a rebound.

The S&P 500 tested new lows below the 4250 level, reflecting traders' concerns about a more hawkish Fed.