Stocks dropped at the open on Friday as investors assessed the US monthly jobs report, which could make or sink the case for the Federal Reserve to start cutting interest rates.
The Dow Jones Industrial Average (^DJI) fell 0.1%, while the S&P 500 (^GSPC) slid almost 0.2%. The tech-heavy Nasdaq Composite (^IXIC) declined by 0.4%.
The US unemployment rate fell unexpectedly to 3.7% in November, the nonfarm-payrolls report showed, reflecting signs that the labor market may not be cooling as quickly as many had initially thought.
Meanwhile, the economy added 199,000 jobs, up from the previous month’s reading when striking auto workers and Hollywood actors came back to the workforce.
The report will serve as a test for stocks, which rallied as investors grew optimistic that the Fed’s rate hikes have peaked and a “soft landing” for the US economy is on the cards. Hints of labor market cooling in earlier data this week were taken as a sign the Fed’s inflation fight is paying off.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
Elsewhere, the UK antitrust regulator said Friday it will examine OpenAI’s partnership with Microsoft (MSFT) for a potential merger probe. The move comes after AI buzz boosted tech stocks on Thursday, with gains for Alphabet (GOOGL) and AMD (AMD) after they introduced products.
In commodities, oil prices bounced back but are still on course for the longest run of losses in five years as the market weighs whether extra OPEC+ cuts will fend off a global glut. West Texas Intermediate (CL=F) futures and Brent (BZ=F) crude futures were both about 2% higher.
Stocks cool as jobs report comes in hot
Wall Street pumped the breaks on the end-of-year rally following a hotter-than-expected jobs report that market watchers see as lessening the chances the Federal Reserve will cut interest rates in early 2024.
The Dow Jones Industrial Average (^DJI) fell 0.1%, while the S&P 500 (^GSPC) slid almost 0.2%. The tech-heavy Nasdaq Composite (^IXIC) declined by 0.4%.
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Fed rate bets are on the move
As expected, Friday’s…
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