Friday, June 14, 2024
30 C
Brunei Town

Stocks end lower after mixed jobs data as tech sinks again

AP – Stocks closed lower and Treasury yields rose on Friday with much of Wall Street anticipating that the Federal Reserve will raise interest rates as soon as March despite a mixed report on the United States (US) jobs market.

The downbeat finish capped the worst week for the S&P 500 technology sector since October 2020 and the biggest weekly drop for the tech-heavy Nasdaq in nearly a year.

The S&P 500 fell 0.4 per cent, and the yield on the 10-year Treasury hit its highest level since COVID-19 began pummelling markets at the start of 2020.

The benchmark index had been up 0.3 per cent in the early going and then fell as much as 0.7 per cent following the mixed reading from the US Labor Department, which is usually the most anticipated piece of economic data every month.

Employers added only about half the number of jobs last month that economists expected, a seeming negative for the economy. But average wages rose more for workers than expected.

Pedestrians passing by the New York Stock Exchange building. PHOTO: AP

On the whole, many investors saw it as evidence that the jobs market is strong enough for the Federal Reserve to continue leaning toward raising interest rates more quickly off their
record lows.

“Does this bring the Fed to the table in March or in June?” said Director of portfolio strategy at Verdence Capital Advisors Megan Horneman. “It’s a moot point, in the long run. They’re going to raise rates in 2022.”

Higher rates could help corral the high inflation sweeping the world, but they would also mark an end to the conditions that have put financial markets in “easy mode” for many investors since early 2020.

Higher rates also make shares in high-flying tech companies and other expensive growth stocks less attractive, which is why the S&P 500 tech sector bore the brunt of the sell-off this week as bond yields rose.