U.S. Stock Market Plummets Following Strong Job Growth Report
The U.S. stock market experienced significant declines on Friday, January 10, 2025, as investors reacted to a stronger-than-expected jobs report for December. The Dow Jones Industrial Average fell approximately 1.6%, losing nearly 700 points, while the S&P 500 decreased by 1.5%, and the Nasdaq Composite tumbled by 1.6%. This downturn erased all year-to-date gains for the three major indices.
The latest employment data revealed that the U.S. economy added over 256,000 jobs in December, surpassing Wall Street expectations by nearly 100,000. Additionally, the unemployment rate dropped to 4.1% from 4.2%, further indicating a resilient labor market. Despite the positive employment figures, analysts expressed concerns that this strength could lead the Federal Reserve to maintain higher interest rates for a longer period, dampening hopes for immediate rate cuts.
The 10-year Treasury yield surged, nearing 4.8%, the highest it has been since late 2023, as investors adjusted their expectations regarding the Fed’s interest rate policy. With inflation concerns resurfacing, market projections now indicate no rate cuts before July 2025, according to the CME FedWatch Tool.
In light of the disappointing stock performance for the week, upcoming corporate earnings reports from major banks and inflation data set for release next week may further inform market movements and investor sentiment.
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