Wall Street’s foremost index ended the week on a losing note as concerns about inflation and rising rates of interest outweighed the strong jobs report released earlier on Friday by the federal government.
The Dow Jones Industrial Average plummeted 348.58 points, or 1%, to 32,899.70, and the Nasdaq composite was 2.5% lower.
The S&P 500 was 1.6% lower after a report showed employers hired more employees last month than economists expected.
Despite the strong jobs report, the selloff reflects investor sentiment that the low unemployment figures mean it’s more likely that the Federal Reserve will move to hike rates of interest aggressively.
If the Fed acts too quickly in tightening monetary policy, analysts fear it may lead to a recession.
The Labor Department released figures on Friday showing that employers added 390,000 jobs last month, higher than expectations for 322,500.
That sent Treasury yields climbing, though they initially wobbled as investors moved from one knee-jerk response to a different following the report’s release.
Despite a sturdy jobs report, investors on Wall Street remained nervous about potential rate of interest hikes by the Fed.Getty Images
The yield on the two-year Treasury, which tends to maneuver with expectations for Fed motion, rose to 2.66% from 2.62%.
The ten-year yield, which tracks expectations for longer-term growth and inflation, rose to 2.96% from 2.91% after earlier climbing as high as 2.99%. It settled at 2.95%.
“As Fed speakers consistently remind us that the trail towards draining inflationary pressures from the economy goes to be ‘bumpy’ and ‘painful’ the market agrees because it navigates between seeing the subsequent recession across the corner to witnessing a still healthy economic backdrop,” Quincy Krosby, chief equity strategist for LPL Financial, told The Post.
“For now, the market sees a Federal Reserve attempting to navigate a painful and bumpy road, yet trying to seek out a soft exit,” Krosby said.
And the market finds itself between wanting to imagine within the rallies but not believing that the Fed can negotiate a soft landing.
With Post wires