U.S. stocks tumbled Friday after government employment data showed more than half a million jobs were added in January — throwing a wrench in hopes for a pause on rate increases. The S&P 500 (^GSPC) dropped 1%, while the Dow Jones Industrial Average (^DJI) fell 0.8%.
The U.S. economy added 517,000 jobs last month, far more than the 188,000 payroll gain expected by economists. The unemployment rate fell to 3.4%, the lowest since 1969. This positive news was overshadowed by subpar earnings results from Big Tech giants, which weighed on investor sentiment.
The S&P 500 (^GSPC) dropped 1%, while the Dow Jones Industrial Average (^DJI) shed abut 130 points, or 0.4%. The technology-heavy Nasdaq Composite (^IXIC) finished lower by 1.6%.
Continued resilience in the labor market likely takes the pressure off the Federal Reserve to reverse course on its rate hiking campaign, an outcome markets have been betting on happening later this year, which in part helped fuel the stock market rally to start the year.
“Assuming there is no irregularity in the data, tepid wage growth in January is likely to give the Fed more breathing room to continue.
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