Market Midday: Stocks Slide, Record Diesel Prices Keep Inflation in Focus • 9/4/26

0:00It's the NBC Business News Update Market Midday. I'm Jessica Ettinger. Major averages all in the red this afternoon, even with a strong August jobs report. Investors are a little worried that could sharpen the Fed's focus on high inflation and not on the job market. And it could mean a higher chance for an interest rate increase later on this month. The Dow is down 310 points this afternoon, about a half a percent. Apple shares leading it lower. They're down more than 2%. The S &P 500 index down 33 points. The NASDAQ is down 110 points. Chipmaker shares are mixed. NVIDIA in the green up 1%. Micron up 4 % this afternoon.

0:45Look at this August jobs report. Hold on to your seats, folks. Non-farm payrolls for the month of August up 162K. 162 ,000. That's basically three times what expectations are. We're cooking in Greece on this report. 162 would be the best level going back to March of this year. Economists note that two-thirds of U.S. job creation in August is accredited to restaurants and local education hiring. The Brookings Institution's Wendy Edelberg tells CNBC she thinks that big August number might get revised lower. I am very puzzled, actually, by the strength in the payroll numbers. So at 71 ,000 on average for the last three months, that's like seven times faster than the pace of job growth last year.

1:40I see nothing else in the labor market that suggests that kind of pickup in activity. Diesel fuel has hit a fresh all-time high. National average for a gallon is now sitting at$5.85, and that is surpassing the previous high that was hit back in 2022. That's CNBC's Morgan Brennan with AAA data. It's nearly a 60 % increase over the same period last year when diesel was just$3.71 a gallon. Diesel is the fuel most embedded in the economy, and its high price can routinely get passed on to consumers. Diesel powers trucks, trains, ships, and farm equipment. A lot of that goes right to consumer products.

2:20Here's conference board economist Dana Peterson on CNBC. Prices being elevated means higher consumer prices later because it feeds through the supply chain. This does factor into our own forecast where we anticipate that the oil price shocks will be through the supply chain and continue to keep commodity prices. and then everything that depends upon commodity prices elevated through the end of this year and into next year. Inflation is in focus. The latest read comes a week from today with the August CPI, the Consumer Price Index. A hot report could mean an interest rate increase by the Fed later this month, which makes borrowing more expensive and hurts corporate profits and can send stocks lower.

3:06It also hits consumers with mortgages, auto loans and credit card debt. The average pay raise for workers in the U.S. next year will be about 3.2 percent based on merit in a new Mercer Quick Pulse U.S. compensation planning survey of a thousand organizations. USA Today says using the July inflation rate of 3.4 percent, Americans will likely again be underwater next year with pay not keeping up with prices. Jessica Ettinger, CNBC. Hey, Fidelity. Can I get a second opinion on stocks in the Fidelity app?

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