Wall St eyes subdued open as private payrolls data deepens recession worries

Wall Street’s main indexes were set for a subdued open on Wednesday as weaker-than-expected private payrolls data for March deepened worries that the rapid interest rate hikes by the Federal Reserve may tip the U.S. economy into a recession.

The ADP National Employment report showed U.S. private employment rose by 145,000 jobs last month, compared with economists’ projections of an increase of 200,000 jobs, adding to recent signs of a cooling labor market.

With growing concerns about a worsening economic outlook following the recent turmoil in the banking sector, market expectations have shifted in favor of the U.S. central bank hitting the brakes on its interest rate hikes.

“The Street is realizing that with slower ADP payrolls … and the possibility that we get an undercut in Friday’s payroll numbers, the economy is indeed slowing and the Fed will only need to make one more rate hike, if any,” said Sam Stovall, chief investment strategist of CFRA Research in New York.

“But at the same time, I think investors are closely watching to make sure that we don’t fall into a deep recession.”

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