Besides tending to lag the market when excitement is high about the economy, utility stocks also get hurt by high interest rates. Stocks of utilities were also particularly weak, with those in the S&P 500 dropping 1.8%. Their huge gains have set expectations very high for their growth, which they need to meet to justify the big runs for their stock prices.Īpple, another member of the Magnificent Seven, slipped 0.5% even though it reported better profit than expected.Ĭharter Communications slumped 16.5% for the sharpest loss in the S&P 500 after it reported weaker profit for the latest quarter than expected. They’re both members of a small group of Big Tech stocks known as the “Magnificent Seven” responsible for the majority of Wall Street’s run to a record. Meta Platforms, the owner of Facebook and Instagram, soared 20.3% after it reported stronger profit for the latest quarter than expected and said it would start paying a dividend to its investors.Īmazon rallied 7.9% after it reported stronger profit and revenue for the latest quarter than expected. The jobs report landed on Wall Street amid a maelstrom of profit reports that could have helped move the market on their own. workers, which could help offset the effect of higher wages. He pointed to a report earlier this week that showed an increase in productivity for U.S. “The Fed has stepped back from its insistence that the labor market needs to weaken before inflation sustainably falls.” “The big payroll gains and wage gains aren’t something to be feared,” said Brian Jacobsen, chief economist at Annex Wealth Management. That is, will a stronger economy create enough extra in corporate profits to make up for delayed or dashed hopes for quick and significant cuts to interest rates? The question for the stock market will be whether the upside of such strength outweighs the downside. And the government said hiring was actually much stronger in December than it had earlier reported. The unemployment rate unexpectedly did not get worse. Average hourly earnings for workers rose more in January than forecast. After the jobs report, traders shifted some bets even further out the calendar to June, according to data from CME Group.īesides the overall hiring number, the jobs report included several signals showing much more strength than expected. Traders had already pushed out bets for the timing of the first Fed rate cut to May from March following Powell's warning earlier this week. The yield for the 10-year Treasury leaped immediately after the release of the jobs report and climbed to 4.02% from 3.88% late Thursday. "It’s definitely not the type of data the Fed had in mind when they said they wanted to see more evidence that inflationary pressures were under control.” “The Fed threw some cold water on the idea of a March rate cut less than 48 hours ago, and today’s surprisingly strong jobs report won’t dry things off,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley. Fed Chair Jerome Powell said earlier this week that it’s unlikely cuts will begin as soon as traders had been hoping. stock market has surged to record heights. Hopes for such cuts, which can relax the pressure on the economy and goose investment prices, have been a major reason the U.S. That in turn could mean a longer wait for the Federal Reserve to begin cutting interest rates. While the strength is a boon for workers and keeps the risk of a recession at bay, the worry is that it could preserve some upward pressure on inflation. employers hired many more workers last month than economists expected. Stocks felt pressure from much higher yields in the bond market after a report showed U.S. And the Russell 2000 index of smaller stocks fell 0.6%. The Big Tech stocks, which are two of Wall Street’s most influential, also vaulted the Nasdaq composite up by 1.7%.īut the Dow Jones Industrial Average, which has less of an emphasis on tech, rose by a more modest 0.3%, or 134 points. It’s in a torrid run where it’s climbed in 13 of the last 14 weeks. TOKYO – Big Tech stocks once again carried Wall Street to a record Friday, even though the majority of stocks fell amid worries about the downside of a hot economy.īig gains for Meta Platforms and Amazon helped drive the S&P 500 index up by 1.1% to its latest all-time high.
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