S&P 500, Nasdaq Plunge 3% On Rate Path Worries After Jobs Report

Barry Adams
07 Oct, 2022
New York City

Stocks on Wall Street dropped sharply after the latest jobs report provided another signal for the Fed to continue its rate hike campaign. 

The good news on the economy meant bad news for Wall Street as investors focused on the Fed action. 

 

September Payrolls Rise 263,000 

The U.S. economy added 250,000 jobs in September, lower than unrevised 315,000 in August, the U.S. Bureau of Labor Statistics reported Friday. 

The shrinking pool of available workers also dragged down the unemployment rate to 3.5% from 3.7% in August, the Labor Department said. 

Average monthly jobs added in 2022 edged down to 420,000, lower than 562,000 in 2021. 

Before the release of the September month data, net new job additions averaged 439,000 in the first eight months of 2022, reflecting labor market strength and tight job market conditions. 

With the September month job addition, the U.S. labor market is now about 500,000 larger than the pre-pandemic level. 

Average hourly earnings increased 0.3% from the previous month and 5% from a year ago.  

The yield on 2-year notes increased to 4.30%, 10-year notes advanced to 3.861% and 30-year bonds rose to 3.81%. 

The S&P 500 index declined 2.4% to 3,56.23 and the Nasdaq Composite index dropped 3.3% to 10,706.89. 

Tech stocks led the decliners and the energy complex led the gainers. 

Crude oil increased $3.45 to $92.35 a barrel and natural gas fell 10 cents to $6.87 a thermal unit.  

Levi Strauss dropped 9.8% to $14.37 after the apparel maker lowered its full-year sales and earnings outlook. 

Advanced Micro Devices, Inc declined 11.3% to $60.27 after the chipmaker lowered its sales forecast on a weaker-than-expected personal computer market. 

 

European Stocks and Currencies Turn Lower 

European markets dropped sharply after the release of the U.S. jobs report in mid-day trading. 

The DAX index fell 1.6% to 12,732.0, the CAC-40 index dropped 1.1% to 5,866.94 and the FTSE 100 index was nearly flat at 6,991.0. 

The dollar advanced against all major currencies after the release of the jobs report on the expectations of higher interest rates. 

The euro edged down to 97.62 U.S. cents and the British pounds declined to $1.109. 

The dollar also advanced against the Swiss franc to 99.31 U.S. cents.