On Friday, US stocks closed lower: the S&P 500 fell 1.04% to 4,136.48, the Dow Jones lost 0.38% to 33,926.01, and the Nasdaq made a -1 .59% to 12,006.96.
Over the past week, US stock markets have had to contend with the fallout from interest rate hikes by the Federal Reserve and the European Central Bank. This action was already anticipated by the markets.
The Federal Reserve raised interest rates by a quarter of a percentage point, approaching the 4.75% peak reached since 2007, which could be seen as a sign that the rate hike is easing after three and a half quarter hikes of a percentage point.
Nonetheless, the stock market reacted positively to Chairman Powell’s statement that progress was still toward the 2% target.
On Friday, the Labor Department’s jobs report showed an increase of 517,000 jobs, exceeding the 185,000 forecasts and surpassing the 223,000 reported in December. According to Econoday, December was the eighth consecutive month and the tenth of the last eleven in which wage increases were higher than expected.
The unemployment rate fell to 3.4% from the 3.6% expected. On average, hourly wages increased by 0.3% over the month, in line with forecasts.
The US stock markets did not interpret these data positively, believing that there may still be a possibility that the interest rate hike could continue over time. All stock exchanges closed negative on Friday: the S&P 500 fell 1.04% to 4,136.48, the Dow Jones lost 0.38% to 33,926.01, and the Nasdaq lost -1.59 % to 12,006.96.
The 10-year US Treasury interest rate hit its lowest point since mid-September on Thursday, ending at 3.39%. However, when the positive jobs report was released on Friday, the 10-year yield jumped to 3.48%.
The cost of oil fell without too much warning on Friday morning after a second consecutive drop on Thursday. West Texas Intermediate futures topped $76 a barrel, down nearly 5% in the previous two weeks.
The broad stock market and the Nasdaq Composite ended the week positively. The S&P 500 finished up 1.62%, while the Nasdaq Composite rose 3.31%, marking the fifth consecutive week of gains, as the tech sector surge outpaced other significant indices.
The Dow, on the other hand, was the exception, with a decline of 0.15%.