Higher mortgage rates had cut into the housing industry, in particular, after the Fed raised its short-term rates four times this year. The hope on Wall Street had been that the economy was slowing enough to get the Fed to ease up on its rate hikes. Wall Street is coming off the best month for stocks since late 2020, a rally driven mostly by what had been falling yields across the bond market. The 10-year yield, which influences rates on mortgages, rose to 2.84% from 2.69%. The two-year Treasury yield, which tends to track expectations for Fed action, jumped to 3.23% from 3.05% late Thursday.
Wall Street’s clearest moves came from the bond market, where Treasury yields shot higher immediately after the release of the jobs data. “Maybe this is more superficially impressive than substantively impressive.”
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“That was mostly from people who already have a full time job and then the second job is part time,” he said.
The number of people with multiple jobs rose by more than half a million, for example, said Brian Jacobsen, senior investment strategist at Allspring Global Investments. To be sure, some market watchers also pointed to numbers within Friday’s employment report suggesting the jobs market may not be as strong as the overall numbers imply. Higher wages can cause companies to raise prices for their own products to sustain profits, which can lead to something economists call a “wage-price spiral.” But it also raises worries on Wall Street that inflation will become more embedded in the economy. That’s helpful for households trying to keep up with the fastest price gains in 40 years. Both the S&P 500 and Nasdaq posted a gain for the week.īeyond the nation’s strong hiring, wage growth for workers also unexpectedly accelerated last month. The good news on the jobs market helped to limit losses for the Dow Jones Industrial Average, whose stocks tend to move more with expectations for the overall economy. The tech-heavy Nasdaq composite cut its early losses and closed down 63.03 points, or 0.5%, at 12,657.55.
Stocks of technology and other high-growth companies once again took the brunt of the selling amid the rising-rate worries. “It’s a reminder for investors on how uncertain Fed policy is going forward and the strong jobs market data shows just how far the Fed has to go,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.
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