Friday saw no change in the S&P 500 as Treasury yields increased in response to positive economic data, offsetting the release of new tech profits.
The Dow Jones Industrial Average fell 125 points, or 0.3%, while the broad market index gained just 0.1%. Just 0.1% was the rise on the Nasdaq Composite.
Despite a much better-than-expected jobs data, Treasury rates spiked, which kept stocks in check. The Dow Jones forecast of 185,000 jobs was far lower than the 353,000 new jobs that the US economy added in January.
Additionally, the report contained inflationary indicators in the form of higher-than-anticipated wage rise. Salary growth exceeded a forecast of 4.1%, with an annual growth of 4.5%. Following his indications this week that a rate drop in March was improbable, Fed Chair Jerome Powell made this move.
The benchmark yield on the 10-year Treasury increased by 14 basis points to 4%.
The gradual decline in the unemployment rate and the increase in average hourly pay complete a consistent picture of a labour market that is still strong, according to Stephen Stanley, chief U.S. economist at Santander. “Will this ultimately cause the market’s opinion of early rate reduction to cool? The Fed is, in my opinion, still on hold until November.
Source (CNBC)
