The Dow, S&P 500 and Nasdaq are selling off amid surprising labor market numbers and inflation concerns

The Dow, S&P 500 and Nasdaq are selling off amid surprising labor market numbers and inflation concerns

U.S. stocks tumbled on Friday as investors digested a final 2024 jobs report that beat expectations for hiring and added more uncertainty about the direction of interest rates this year.

The Dow Jones Industrial Average (^DJI) fell about 1.3%, or over 500 points, while the S&P 500 (^GSPC) fell 1.3%. The tech-heavy Nasdaq Composite (^IXIC) fell 1.6%, leading the selloff. The three major indicators have wiped out all year-to-date gains and are now below levels at the start of the year.

The December nonfarm payrolls report showed a very healthy labor market: The U.S. economy added over 250,000 jobs during the month while the unemployment rate fell to 4.1%. That’s the good news. The bad news: The strong reading could prompt the Fed to raise interest rates, some on Wall Street believe.

The 10-year Treasury yield (^TNX) continued its recent upward trend on Friday, approaching 4.8% and reaching its highest level since late 2023.

Investors were also hit by new data that showed consumers are more pessimistic about future inflation. Inflation expectations for the coming year rose to 3.3% this month from 2.8% last month, according to a new reading from the University of Michigan Consumer Sentiment Index on Friday. The current value is the highest since May 2024. Long-term inflation expectations also rose from 3.0% last month to 3.3% this month.

In recent days, Fed Chairman Jerome Powell and other officials have made it clear they are moving more slowly in cutting interest rates. Amid this sentiment and following the labor market situation, markets do not expect any relief before July, according to the CME FedWatch Tool.

DJI – Free real-time quote USD

42,059.55 (-1.35%)

As of 10:50:43 a.m. EST. Market open.

^DJI ^IXIC ^GSPC

Meanwhile, investors enjoyed a series of positive gains. Walgreens (WBA) posted a first-quarter profit increase, a sign that the healthcare company’s turnaround efforts are paying off. Shares rose more than 20% in morning trading.

Shares of Delta (DAL) rose more than 9% after a record year in travel led to a fourth-quarter profit increase and record annual revenue for the airline.

But Nvidia (NVDA) shares came under pressure as the White House is expected to announce new chip export restrictions soon. The AI ​​chip boss criticized President Biden for the 11th hour rule changes that were allegedly aimed at undermining the new Trump administration.

LIVE 5 updates

  • Hamza Shaban

    The hot jobs report supports the Fed’s interest rate retention this month

    A hot jobs report makes it even more likely that the Federal Reserve won’t cut interest rates at its first meeting of the year in January — or for the foreseeable future, as signs of a strong economy continue to emerge, Yahoo Finance’s Jennifer Schonberger reports.

    “I think they’re done here,” Blake Gwinn, head of U.S. interest rate strategy at RBC Capital Markets, told Yahoo Finance on Friday.

    “This January cut was almost dead before this release,” Gwinn added. “Now let’s look at the March print data” – ahead of the Fed’s second meeting in 2025.

    Fed officials were already worried about signs of persistent inflation, citing that as a reason for a cautious approach in 2025, as well as expectations that the new Trump administration’s trade and immigration policies could provide more upward pressure.

    Read more about the Fed’s next monetary policy move here.

  • Alexandra Canal

    Venu Sports no longer exists

    Venu Sports, the planned sports streaming service from Disney’s ESPN (DIS), Warner Bros. Discovery (WBD) and Fox (FOXA), will no longer debut.

    “After careful consideration, we have jointly agreed to discontinue the Venu Sports joint venture and not launch the streaming service,” the three companies said in a joint statement on Friday.

    “In an ever-changing market, we have determined that the best way to meet the evolving needs of sports fans is to focus on existing products and distribution channels.”

    The move caps a wild week for Venu after FuboTV (FUBO) settled all legal disputes related to the debut earlier this week. The news and sports streamer filed an antitrust lawsuit against the launch of the platform last year.

    The settlement coincided with the announcement that Fubo, an Internet TV bundler, would partner with Disney’s Hulu + Live TV business. Separately, Disney will launch a flagship ESPN streaming service in the fall.

    Fubo shares rose about 10% in early trading on Friday after rising 250% on Monday following the announcement of the Disney deal. Fox and WBD shares fell on the news. Disney shares traded flat.

  • Hamza Shaban

    Stocks fall as hot jobs report dashes rate cut hopes

    The “higher for longer” narrative just got a dose of strength on Friday.

    The nonfarm payrolls report showed a very healthy labor market: The U.S. economy added over 250,000 jobs in December while the unemployment rate fell to 4.1%. At first glance, this is good news. But the new data also created a dilemma for Wall Street: A strong reading could prompt the Fed to raise interest rates.

    U.S. stocks fell at the open as investors digested the final 2024 jobs report, which beat expectations for hiring and added more uncertainty about when the next interest rate cut will come.

    Nasdaq GIDS – Free real-time offering USD

    19,221.62 (-1.32%)

    As of 10:50:38 a.m. EST. Market open.

    ^IXIC ^DJI ^GSPC

    The Dow Jones Industrial Average (^DJI) slipped about 0.5%, while the S&P 500 (^GSPC) lost 0.6%. The tech-heavy Nasdaq Composite (^IXIC) fell 0.9%, leading declines as key indicators were set for weekly losses.

  • Myles Udland

    The US labor market is ending 2024 with a good result

    The U.S. economy added 256,000 jobs in December, the most in nine months and nearly 100,000 more than Wall Street expected, as the job market ended 2024 surprisingly well.

    In December, the unemployment rate also fell from 4.2% to 4.1%. Revisions showed the unemployment rate never reached the peak of 4.3% originally reported in November.

    Friday’s report showed a rise in Treasury yields as investors continue to scale back their expectations for Fed rate cuts in 2025, with no rate cuts expected before June. Stock futures fell after the report.

  • Good morning Here’s what’s happening today.

    It is Labor Day.

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    Business News: Non-Farm Employment Report, Unemployment Rate (December)

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