NEW YORK (AP) — U.S. stocks are plummeting on concerns that: Good news on Friday's job market perhaps Too good And maintaining it will prove to be bad for Wall Street. inflation and interest rate expensive.
The S&P 500 fell 1.5% in intraday trading, marking its fourth decline in the past five weeks. As of 11:45 a.m. ET, the Dow Jones Industrial Average was down 628 points, or 1.5%, and the Nasdaq Composite Index was down 1.8%.
Stocks came under pressure from the bond market after reports that U.S. employers added more jobs last month than economists expected.
This strength in recruitment is, of course, good news for workers looking for work. But it could also maintain upward pressure on inflation. keep the overall economy strong. That could deter the Fed from cutting interest rates, which Wall Street favors. Lower interest rates not only disrupt the economy, they can also drive up investment prices.
The Fed has already indicated that it will likely cut rates fewer times this year than originally expected due to concerns about rising inflation. Part of the reason is that some officials are taking seriously the possibility that Tariffs and other policies It comes from President-elect Donald Trump That could worsen inflation.
Indeed, Friday's jobs report may not be as strong as it seems on the surface. Brian Jacobsen, chief economist at Annex Wealth Management, said that while overall payrolls were higher than expected for the month, “manufacturing is still hurting.”
“The macroeconomics may be fine, but the microeconomics can be very different for each individual,” he said.
The raises workers are getting may also be a more important data point for the Fed, with average hourly wage growth less than 4% last month. That's “what the Fed wants,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.
This nuanced view has allowed Treasury yields to regain some of their initial spike following the jobs report. But preliminary results from a separate report released late in the morning highlighted the issue, after suggesting U.S. consumers were becoming more pessimistic about the direction of inflation.
Consumers expect inflation to be 3.3% over the next year, up from 2.8% expected last month and the highest since May, according to a University of Michigan survey. Expectations have worsened across the board, especially among households with lower incomes and political independents, said Joan Hsu, director of consumer research.
