Following the publication of stronger-than-expected U.S. jobs statistics, stocks declined on Friday as Treasury yields increased.
The Dow Jones Industrial Average dropped 150 points, or 0.4%. The Nasdaq Composite fell 0.7%, while the S&P 500 declined by 0.6%
170,000 jobs were anticipated by economists surveyed by Dow Jones. Indeed, the increase in salaries last month was less than anticipated.
The report caused the benchmark 10-year Treasury yield to increase by more than 12 basis points, and it is now trading close to a 16-year high that was reached earlier this week. The most recent increase in the 10-year Treasury yield was 4.845%.
Investors are worried that the Federal Reserve will need to maintain higher rates for a longer period of time to control inflation in response to Friday’s jobs report.
The 336K figure is “monstrous,” according to Adam Crisafulli of Vital Knowledge, who also wrote a note. “The Fed could easily move another 25bp and maintain at an elevated level for a lengthy period.” “Rates will continue to be exposed to upside risks, and stocks won’t have a chance at that time.”
As rates increased, a number of large-cap tech shares plummeted. Platforms for Nvidia and Meta decreased marginally. The vulnerable to high rates utilities industry also saw downturn. Dominion Energy and Sempra both lost 2%, while AES lost 5%.