US stocks finish mixed amid fears of more Fed hawkishness after hot jobs report

US stocks finish mixed amid fears of more Fed hawkishness after hot jobs report
Trader Leon Montana works on the floor of the New York Stock Exchange stocks NYSE worryAP Photo/Richard Drew
  • US stocks closed mixed on Friday after November's job report clocked in above economists' expectations.
  • The Dow reversed higher as the Fed is still largely expected to slow its pace of rate hikes.

US stocks closed mixed in volatile trade on Friday after the strong November jobs report triggered an early sell-off on fears the Federal Reserve will have to stay hawkish.

The addition of 263,000 jobs last month topped forecasts for 200,000, suggesting the central bank faces a longer battle against inflation. But the Dow Jones Industrial Average turned positive while the S&P 500 and Nasdaq pared losses sharply, as analysts raised doubts that the data point would be enough to change the direction of rates.

JPMorgan Asset Management chief strategist David Kelly said the jobs report was likely distorted, and there's still plenty of room for the Fed to taper rate hikes and pause in 2023.

The central bank is still widely expected to deliver a 50-basis-point hike at its next meeting, slowing down after four consecutive increases of 75 basis points.

Here's where US indexes stood as the market closed 4:00 p.m. on Friday:


To be sure, a strong labor market is a sign of an expanding economy, potentially putting pressure on the Fed to keep tightening despite already having raised rates by 375 basis points so far this year.

Principal Asset Management chief strategist Seema Shah said the jobs report could push the Fed to raise rates above 5%. Oanda analyst Edward Moya said a more balanced response was possible, adding that the payroll data could lead to smaller rate hikes into 2023.

"This report doesn't mean the risks of the Fed raising rates to 6% are back on the table. It might add another 25bp to the February meeting, and it doesn't change the trend of the data for both," he said

Here's what else is happening:

In oil, commodities, and crypto: