Stocks ended mixed on Friday as bond yields soared after a stronger-than-expected July jobs report.
At the closing bell, the tech-heavy Nasdaq was the day’s biggest laggard among equity indexes, down 0.5 percent, while the S&P 500 fell 0.2 percent and the Dow rose 0.2%.
In July, the US economy added 528,000 jobs as the unemployment rate fell to 3.5%. Economists had expected job growth to come in at just 250,000 last month.
In the bond market, the story that July jobs data will lead to further rate hikes has been a little easier to see, with the yield on US 10-year notes near 2.84% on Friday , about 30 basis points higher than the low earlier this week. .
The yield curve also continues to move deeper into the inversion, with the spread between 2-year and 10-year yields standing at 40 basis points, or 0.40%, on Friday. This push higher in yields also led to a rally in the dollar.
The initial stock market reaction saw stocks match bonds and stocks were uniformly lower.
Most economists see this report as keeping the Federal Reserve on track to continue aggressive rate hikes, likely raising rates by 0.75% in September after increases of the same magnitude in June and july
Since mid-June, the S&P 500 has gained more than 10% as investors were optimistic that a potential “pivot” or slowdown in the pace of Fed rate hikes could come in the coming months.
Investors are also watching commodity markets, with WTI crude prices – the US benchmark – falling below $89 a barrel on Thursday to their lowest levels since early February. Crude oil prices were little changed on Friday.
The price of gas in the US it has now declined for 50 days in a row.
As for individual stocks, Friday’s action showed that outsized volatility continues across several stocks, with shares of Bed, Bath & Beyond gaining more than 32% on no news.
Meanwhile, meme darling AMC surged 18% after announcing its latest quarterly results and announcing plans to issue a preferred stock dividend that will trade under the ticker “APE.”
The story continues
Shares of iRobot rose more than 19% after Amazon announced plans to buy the Roomba maker for $1.7 billion.
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