US stocks fall after jobs report

In the bond markets, the yield on the 10-year US Treasury rose to 2.973% from 2.914% on Thursday. Yields and prices move inversely.

Employers in the United States It added 390,000 jobs last monthIt was the slowest pace of growth since April of last year, while the unemployment rate remained at 3.6%. Wages grew 5.2% year over year, down from 5.5% in April.

Economists polled by the Wall Street Journal expected that employers added 328,000 jobs last month. They saw the unemployment rate drop slightly to 3.5%, which would have matched its 53-year low and level in February 2020 before the Covid-19 pandemic hit the US.

Federal Reserve officials are watching closely labor market situation They decide how much and how quickly to raise interest rates in the coming months.

One of the points of concern to officials is that the labor market is strong-willed In addition to high inflation As competition for workers enhances the bargaining power of wages. Federal Reserve Vice Chair Lyle Brainard said Thursday that she Support plans to raise interest rates by half a percentage point at a meeting later this month and again in July.

Frank Holland, chief global strategist at Danske Bank, said before the report was released that he would be looking to see if wages grew last month. This – combined with a slowdown in hiring – could cause markets to stumble, he said.

“This is an unfortunate cocktail,” he said. “Then we have inflation on a larger scale, and then the Fed will continue to tighten.”

shares

Tesla

decreased after 7% Reuters reported This is the CEO

Elon Musk

Looking to cut staff at the electric car maker. Mr. Musk told employees earlier this week to return to the office or… Find a job elsewhere.

Markets have experienced increased volatility in recent months as investors tried to assess a mix of variables that clouded their expectations and increased their fears of a recession.

But in the past two weeks, some volatility has subsided.

Justin Wiggs, managing director of equity trading at Stifel Nicolaus, said in the past week or so that he has seen the number of buy orders among his clients rise, something he believes is directly related to lower volatility in the big stock market.

Wall Street’s measure of fear, the Cboe Volatility Index, is trading in the mid-20s again, and VVIX, a measure of how volatile the VIX itself is, is trading at its lowest level in two years. VVIX is based on options prices on the volatility index.

“The volatility swings becoming less and less bad has given some people solace in the idea that maybe they can put the money back in business,” Mr. Wiggs said.

Tightening of fiscal conditions by the Federal Reserve may curb inflation, but it also threatens to weigh on growth and the housing market. Russia’s war against Ukraine And China’s no-spreading policy of the Coronavirus has increased supply chain disruptions, leading to increased inflation.

Oil prices also remained above $100 a barrel, increasing the cost of energy and fuel. Brent crude futures, the global oil standard, rose 0.4% to $118.08 a barrel.

“You have a really strong US economy now but we have this really high inflation that hasn’t gone down,” Mr. Hollande said. “Ultimately, it will get consumers to a point where they can say, let’s look at our budget and maybe tighten up a little bit here and there. If everyone pulls back a little bit, you’re heading into a recession.”

Outside, the Stoxx Europe 600 was almost flat. Markets in the UK, Hong Kong and China are closed for holidays. Japan’s Nikkei 225 closed up 1.3%, while South Korea’s Kospi added 0.4%.

Write to Caitlin Ostroff at [email protected]