US stocks finish mixed amid fears of more Fed hawkishness after hot jobs report
- 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:
- S&P 500: 4,071.71, down 0.12%
- Dow Jones Industrial Average: 34,429.88, up 0.10% (34.87 points)
- Nasdaq Composite: 11,461.50, down 0.18%
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:
- Bank of America warned it was time for investors to sell any rally in stocks, as job losses are set to shock the market in 2023.
- EU diplomats settled on a price cap target of $60 a barrel for Russian oil, just as EU sanctions on Russian oil are set to take effect on Monday.
- Sam Bankman-Fried's Alameda Research was found to have shielded FTX from a loss of up to $1 billion, a report said.
In oil, commodities, and crypto:
- Oil prices slipped, with West Texas Intermediate down 1.39% to $80.09 a barrel. Brent crude, the international benchmark, inched lower 1.31% to $85.74 a barrel.
- Gold edged lower 0.27% to 1,798.43 per ounce.
- The 10-year Treasury yield fell 1 basis point to 3.515%.
- Bitcoin ticked higher 0.06% to $16,989.10.
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