There was a new post on Jun 3, 2022, 10:41am.
The stock market moved lower on Friday after the U.S. economy added a more-than- expected 385,000 jobs in May.
The labor market recovery makes it unlikely that the Fed will stop hiking rates.
The S&P 500 lost 1.4% and the tech-laden Nasdaq was down 2%.
According to new data from the Labor Department, the U.S. economy added 390,000 jobs in May, higher than the 328,000 new jobs economists were expecting but lower than the 436,000 jobs added in April.
According to Tom Essaye, founder of the Sevens Report, the strong job numbers will likely reverse any hopes of a pause in rate hikes after the June/July increases.
According to Jeffrey Roach, chief economist for LPL Financial, the tight labor market and stable job growth will allow the Federal Reserve to continue to tighten financial conditions and remove the historic level of accommodation in the markets.
The ten-year Treasury note jumped to 2.97% on Friday, the day after the jobs data, as investors remained concerned about rising rates leading to an economic slowdown.
Technology shares were particularly hard-hit by the rising rates and dragged markets lower, while recently rebounded consumer stocks were also among the worst performing sectors on Friday.
Musk is said to be looking to cut 10% of the company's workforce. As he has a bad feeling about the economy, Musk called for a pause on global hiring.
As investors look for appropriate multiples on earnings growth, the stock market will likely continue to react negatively to the report. Full employment in the US is a buffer against slowing global economic growth.
The stock market is slightly lower for the week. The markets have struggled for direction recently, with stocks snapping a seven-week losing streak last Friday. As investors fear that rising rates and surging inflation could lead to a slowdown in economic growth, volatility has once again increased. After raising interest rates by a half-percentage point in early May, the Federal Reserve is on track to raise rates again by a small amount in June and July.
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