Market Reactions to Economic Data

Recent economic data has deeply impacted U.S. stock markets, particularly following a weak jobs report that heightened recession fears. The confluence of disappointing jobs numbers and manufacturing outputs led to significant market declines, as investors adjusted their strategies in response to these signals. Specifically, the FX carry trade unwinding contributed to increased volatility, with forced de-risking evident in the immediate aftermath, resulting in $20 billion linked to levered ETFs being sold on a single day. This chain reaction demonstrates how economic indicators can trigger broader market movements and influence investor sentiment.