Stocks fell Friday as traders evaluated September’s jobs report, which showed the unemployment rate continuing to say no and sparked a rise in rates of interest.
The Dow Jones Industrial Average fell 630.15 points, or 2.1%, to 29,296.79. The S&P 500 lost 2.8% to three,639.66. The Nasdaq Composite slid 3.8% to 10,652.41, which is lower than 1% above its low of the 12 months.
Friday’s losses trimmed the gains for what started off as a giant comeback week for stocks. The foremost averages still ended the week higher but gave back a lot of the gains from the rally that kicked it off. The Dow rose 2% for the week, while the S&P added 1.5%. The Nasdaq eked out a 0.7% gain.
The U.S. economy added 263,000 jobs in September, barely below a Dow Jones estimate of 275,000, the federal government said Friday. Nonetheless, the unemployment rate got here in at 3.5%, down from the three.7% within the previous month in an indication that the roles picture continues to strengthen at the same time as the Federal Reserve tries to slow the economy with rate hikes to stem inflation.
“While the info was about as expected, the drop within the unemployment rate is seemingly what the markets are obsessive about due to what it means for the Fed,” said Bleakley Financial chief investment officer Peter Boockvar. “When combined with the low level of initial jobless claims, the pace of firing’s stays muted and this after all gets the Fed all fired up about continuing with its aggressive rate hikes.”
The falling unemployment rate sparked a jump in rates, in turn weighing on stocks. The two-year 12 months Treasury yield rose 6 basis points to 4.316%. (1 basis point equals 0.01%.)
Advanced Micro Devices’ stock tumbled after the chipmaker warned its third-quarter revenue could be lower than anticipated. Levi Strauss shares slipped following a cut to the corporate’s guidance.
“The conclusion many we’ve spoken with have reached is that not only will the Fed not help markets, but of their dogged pursuit of price stability keep going until something breaks within the capital markets,” said Christopher Harvey, an equity analyst at Wells Fargo Securities. “What appears to be their increasingly singular focus — price stability — will likely help catalyze the dislocation.”
