The S&P 500 closed lower on Friday, weighed down by Tesla and other tech-related stocks after a solid jobs report torpedoed recent optimism that the Federal Reserve may end its aggressive campaign to curb decades-long inflation.
Data showed that US employers hired far more workers than expected in July, the 19th straight month of wage expansion, with the unemployment rate falling to a pre-pandemic low of 3.5%.
The report complemented the latest data and painted an optimistic picture of the world’s largest economy after it shrank in the first half of the year.
That disappointed investors’ expectations that the Fed might end its series of rate hikes to cool the economy.
“This is all about the Fed. A very strong jobs report like the one we had puts pressure on the Fed to tighten longer,” said Adam Sarhan, CEO of 50 Park Investments. “The market is afraid that the Fed will overshoot again. If they pull too hard and for too long, it will result in a hard landing, a deep recession.”
Tesla plunged 6.6%, weighing heavily on the S&P 500 and Nasdaq.
Facebook owner Meta Platforms lost 2% and Amazon fell 1.2%, also dragging the index lower.
US Treasury yields rose as the chances of a rate hike increased by 75 basis points in September.
That helped bank stocks, with JP Morgan up 3%, and helped the Dow Jones Industrial Average stay in positive territory.
Focus now shifts to inflation data due next week, with annual US consumer prices expected to rise 8.7% in July after rising 9.1% in June.
Several policymakers have maintained aggressive policy tightening this week until they see strong and durable evidence that inflation is trending towards the Fed’s 2% target.
Soaring inflation, the war in Ukraine, the energy crisis in Europe and the flare-up of COVID-19 in China have unsettled investors this year.
A broadly upbeat second-quarter earnings season helped the S&P 500 recover about 13% from its mid-June lows after a weak first-half performance.
The S&P 500 fell 0.16% to end the session at 4,145.19 points.
The Nasdaq fell 0.50% to 12,657.56 points, while the Dow Jones Industrial Average rose 0.23% to 32,803.47 points.
For the week, the S&P 500 is up 0.4%, the Dow is down 0.1% and the Nasdaq is up 2.2%.
Lyft Inc soared nearly 17% after the ride-hailing company forecast adjusted operating income of $1 billion for 2024 after posting record quarterly earnings.
Rising issues dominated the S&P 500 by a ratio of 1.3 to 1.
The S&P 500 posted four new highs and 30 new lows; The Nasdaq recorded 60 new highs and 38 new lows.
Volume on US exchanges was relatively light at 10.6 billion shares traded, compared to an average of 10.8 billion shares over the previous 20 sessions.
S&P 500 ends as jobs data reignites fears of a rate hike – SABC News
Source link S&P 500 ends as jobs data reignites fears of a rate hike – SABC News