Stocks slide as strong jobs report stokes rate-hike fears

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Stocks are slipping and Treasury yields are jumping on Friday after a blowout US jobs report raised Wall Street’s expectations that the Federal Reserve may soon start raising interest rates sharply…

Stocks are slipping and Treasury yields are jumping on Friday after a blowout US jobs report raised Wall Street’s expectations that the Federal Reserve may soon start raising interest rates sharply.added 467,000 jobs last month

Treasury yields leaped immediately following the jobs report’s release, tracking forecasts that the Fed will hike short-term interest rates more aggressively than earlier expected. The two-year yield, which tends to move with expectations for the Fed’s actions, jumped to its highest level since the start of the pandemic and is more than double what it was two months ago.

That’s why Wall Street has been so shaky over the last month, as investors rush to make moves to get ahead of the Fed. On one hand, higher rates will likely mean stock investors pay lower prices for each $1 of profit that a company produces. On the other, stock prices could remain resilient despite that if those corporate profits keep rising.

Facebook parent Meta slid another 2.3% as big-tech and other stocks seen as the most expensive have taken some of the hardest hits on Wall Street.Snapchat parent Snap soared 45%, and Pinterest gained 4% following their own earnings reports. An 11.8% leap for Amazon following a strong earnings report has helped to limit losses on the S&P 500.its auto production. Such supply-chain issues have been at the heart of the high inflation ripping around the world, and increases in prices at the U.S. consumer level are at a nearly 40-year high.

 

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