‘We are going to see parts of the economy break’: Recession fears move back to the forefront of markets

Investors are reconsidering the risk that the U.S. economy could be about to tip into a recession, following fresh evidence that the red-hot labor market is finally loosening up.

On Wednesday, data showed the private sector added a fewer-than-expected 145,000 jobs in March. This came a day after the Labor Department announced job openings fell to a 21-month low of 9.9 million for February, down from a revised 10.6 million for the prior month. The pair of reports had investors flocking to the safety of Treasurys, and reignited recession fears that left gold prices near record highs.

The economic data also dented the appeal of stocks, sending the S&P 500 index and Nasdaq Composite to lower finishes on Wednesday. Traders now see an almost-certain chance that the Federal Reserve’s main interest rate target will fall by year-end from where it is now — between 4.75% and 5%; they think there’s a decent likelihood that policy makers will pause next month and in June before cutting rates in July.