The BHP Group Ltd (ASX: BHP) share price is down 1.9% in morning trade on Friday.
Shares in the S&P/ASX 200 Index (ASX: XJO) mining giant closed yesterday trading for $43.97. Shares are currently swapping hands for $43.19.
And this comes despite the iron ore price edging 0.3% higher overnight to US$110 per tonne.
Now, it's not just the BHP share price that's in the red today.
At the time of writing the ASX 200 is down 1.8%. And the miners are having a tough day of it, as witnessed by the 2% intraday decline in the S&P/ASX 300 Metals & Mining Index (ASX: XMM).
Here's why investors are hitting the sell button.
Why is the BHP share price under selling pressure today?
Atop its ASX listing, BHP shares trade on a number of international exchanges, including the NYSE.
Yesterday, overnight Aussie time, the BHP share price closed down 2.7% in the US markets.
This came amid a broader market sell-down in both European and US stocks. The Dow Jones, as one example, closed down 1.1%.
Why?
Well, because the US economy, particularly its labour market, is showing surprising strength. Data released by the ADP Research Institute yesterday showed companies in the US took on more workers in June than in any month in more than a year.
Which is good news, right?
Certainly, for the American workers, at least.
But it's a classic case of good news is bad news for equities. As witnessed by the big slide in the BHP share price.
While a strong US jobs market means a recession in the world's top economy might not be on the cards after all, it also means investors can almost certainly expect more interest rate hikes from the Federal Reserve to tamp down inflation.
And if the past year has reinforced anything, it's just how sensitive stock markets are to fast-rising interest rates.
What are the experts saying?
With the BHP share price selling down today on fears of further US rate hikes, here's what some leading experts are saying about the latest US jobs data (courtesy of Bloomberg).
Harry Melandri, a consultant to Macro Intelligence 2 Partners said:
The problem is that for whatever reason, the economy isn't slowing down fast enough. The Fed looks like it has more to do. And if so, a lot of the market is a little bit offside. I don't think positions are huge, but they are not positioned for more hikes.
Scott Ladner, chief investment officer at Horizon Investments added:
The strength of the US labour market is almost unbelievable and this should further push out any concept of a possible recession in the US. But, it should also push out of the market any hopes of a Fed rate cut during 2023.
Liz Ann Sonders, chief investment strategist at Charles Schwab, said she isn't letting the resilient US labour market put her off from investing in quality stocks.
"We think focusing on those quality-based factors with span both on the growth factor side of things and the value factor side of things is the way to approach what you are doing inside your equity allocation," she said.
Despite today's retrace, the BHP share price remains up a healthy 11% over the past 12 months.
