NASDAQ-Adv: 2,098 Dec: 2,148 NYSE-Adv: 1,873 Dec: 2,085(Source: Nasdaq)
Wall Street's main indexes fell on Friday after a strong jobs report deepened fears that interest rates could remain elevated for an extended period.
U.S. job growth soared in September, suggesting the labor market remains strong enough for the Federal Reserve to raise interest rates this year, although wage growth is moderating.
The Labor Department report showed nonfarm payrolls rose by 336,000 jobs in September on a monthly basis, well above expectations of 170,000 additions, according to a Reuters poll of economists.
"Payrolls beat estimates by a wide margin, the economy appears to be booming and the 'higher for longer' narrative will likely revert to simply 'higher,'" said Neil Birrell, chief investment officer at Premier Miton Diversified. Growth Funds.
"This will give the Fed a headache and the rest of us a lot to think about. The US economy is showing its resilience once again."
Benchmark 10-year U.S. Treasury yields hit 16-year highs following the data.
Mega-cap stocks Nvidia (NVDA.O), Meta Platforms (META.O) and Amazon.com (AMZN.O) fell between 0.7% and 0.8%.
Traders put the chance of a rate hike of at least 25 basis points in November and December at around 28% and 45%, respectively, according to CME's FedWatch tool.
The labor market has managed to withstand the onslaught of the Federal Reserve's aggressive rate hike campaign, leaving investors concerned that the central bank will keep its monetary policy tighter for longer in its fight against inflation.
The S&P 500 (.SPX) is forecast for its fifth consecutive weekly decline, while the Dow Jones (.DJI) is on track to decline for the third consecutive week.
Most of the major S&P 500 sectors were trading lower on Friday, with utilities (.SPLRCU), often considered a proxy for bonds, down 1.8%, while the housing-sensitive real estate sector rates (.SPLRCR) fell 1.2%.
Energy (.SPNY) will be the hardest hit among the major S&P 500 sectors this week, while communications services (.SPLRCL) is on track to be the best performer.
Looking ahead, data will once again take center stage, with consumer price inflation and producer price index readings for September due to be released next week.
Attention will also be focused on the upcoming quarterly earnings season, with major banks including JPMorgan Chase (JPM.N), Wells Fargo (WFC.N), Citigroup (CN) and asset manager BlackRock (BLK.N) , which will report next week.
As of 9:35 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 103.14 points, or 0.31%, to 33,016.43, the S&P 500 (.SPX) was down 19.74 points, or 0.46%, to 4,238.45, and the Nasdaq Composite (.IXIC) fell 70.06 points, or 0.53%, to 13,149.78.
Electric vehicle maker Tesla (TSLA.O) fell 2.2% after cutting prices for its Model 3 and Model Y vehicles in the United States.
Exxon Mobil (XOM.N) lost 2.3% after sources told Reuters the U.S. oil producer was in advanced talks to acquire Pioneer Natural Resources (PXD.N). Pioneer shares rose 9.2%.
Declining issues outnumbered advancing ones by a 3.57-to-1 ratio on the NYSE and a 2.20-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 32 new lows, while the Nasdaq recorded four new highs and 102 new lows.
Source: Reuters (Reporting by Ankika Biswas and Shashwat Chauhan in Bengaluru; Editing by Anil D'Silva and Shounak Dasgupta)
