One reason cited for the drop in the stock market has to do with a less than stellar employment report out today, which apparently means that the expected interest rate rise by the Feds in September might now be postponed.
Since rising interest rates would slow down the US economy wouldn’t investors rather the rate continue to stay low? I know it doesn’t help those who depend on bank interest for their income, but why would investors not be happy about delaying interest rate increases? What am I missing here?
Take this kind of analysis with a grain of salt. When reporting these stories, what happens is that events are observed and reported (“job growth was lower than expected”,“the stock market was flat”). Then, the events are just linked together, sometimes based on sound economic principles, and sometimes not. It’s unlikely that the reporter went around interviewing dozens of market participants asking them specifically what motivated them to buy or sell today.
That said, in the particular article you linked, there is no mention of the job report causing poor stock market performance. The article does attempt to establish a link between the job report and interest rate futures. This is a somewhat reasonable interpretation, but again, I doubt the author went around interviewing large numbers of participants in the interest rate futures markets as to why they acted the way they did today.
Yes, all other things being equal (which they never are), a lower interest rate promotes more investment so long as there are sufficient investment opportunities available.