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Friday’s Positive Jobs Data Causes the Dow to Drop 200 Points as Treasury Yields Rise

As Treasury yields increased in response to the publication of stronger-than-expected U.S. jobs data, stocks declined on Friday.

244 points, or 0.7%, were lost by the Dow Jones Industrial Average. S&P 500 and Nasdaq Composite both had 0.9% losses.

170,000 jobs were predicted by economists surveyed by Dow Jones. Undoubtedly, salary growth last month was less than anticipated.

The report caused the benchmark 10-year Treasury yield to increase by more than 12 basis points, bringing it close to a 16-year high reached earlier this week. The last increase in the 10-year Treasury yield was 4.845%.

Investors are worried that the Federal Reserve may need to maintain rates higher for longer in order to control inflation in the wake of Friday’s jobs report.

“The 336K number is gigantic and suggests the Fed could easily go another 25bp and maintain at an elevated level for a long time,” wrote Adam Crisafulli of Vital Knowledge in a note. “Stocks won’t have a chance as long as rates continue to confront upward risks,”

As yields increased, a number of large-cap tech shares decreased. Nvidia and Meta Platforms experienced a little decline. The utilities industry, which is vulnerable to rising rates, dropped 2.5%. AES dropped 5%, Dominion Energy lost 2%, and Sempra lost 2% apiece.

A dismal week is expected for all the major averages. The S&P 500 is down 1.4% so far this week. The broad market index is down for the fifth week in a row, which would be the longest weekly decline since May 2022. For the week, the Nasdaq is down 0.9% and the Dow is down 1.7%.

Source (CNBC)

SourceCNBC
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