Wall Street stocks plummeted Friday, on the back of a strong employment report that fueled expectations the central bank might make fewer interest rate cuts this year.
The Dow Jones Industrial Average lost 1.6 percent to 41,938.45, and the broad-based S&P 500 Index fell 1.5 percent to 5,827.04.
The tech-focused Nasdaq Composite Index retreated 1.6 percent to 19,161.63.
The slide across major indexes came after a Department of Labor report showed the world’s biggest economy adding 256,000 jobs in December.
This defied expectations of a slowdown in job growth, while the unemployment rate ticked down to 4.1 percent as well.
Following the report, the yield on the 10-year Treasury note shot up, before moderating its gains.
Investors took the better-than-expected labor market figures “as a sign” that the Federal Reserve would be slower in reducing interest rates, said Sam Stovall of CFRA.
While the Fed has started cutting rates last year, after the Covid-19 pandemic, policymakers have been balancing this with progress in lowering inflation sustainably.
“January will continue to be a volatile month,” Stovall said, citing interest rate worries and traders’ focus on earnings reports.
According to the CME FedWatch tool, the market sees a 97 percent chance that the Fed holds rates steady at its next policy meeting.
Among individual companies, Apple shed 2.4 percent and Nvidia shares fell 3.0 percent.
bys-tmc/bs
