Stocks plunge as interest rates rise following jobs report.
U.S. stocks declined sharply on Friday, extending the previous day’s selloff after a mixed jobs report sent interest rates higher.
All of Wall Street’s major indices recorded sharp losses on Friday. The Dow Jones Industrial Average (NYSEARCA:DIA) fell 180.43 points, or 0.7%, to 26,447.05.
The much broader S&P 500 Index (NYSEARCA:SPY) declined 0.6% to finish at 2,885.57. Eight of 11 primary sectors contributed to the declines, with information technology, communication services and consumer discretionary shares leading the market lower.
Meanwhile, the tech-driven Nasdaq Composite Index (NYSEARCA:QQQ) plunged 1.3% to finish at 7,788.45.
A measure of implied volatility known as the CBOE VIX (NYSEARCA:VXX) spiked 6.2% to 15.10, its highest in over two months. The so-called “fear index” has risen dramatically over the past two days as share prices plummeted.
In economic data, U.S. employers added 134,000 workers to payrolls last month, well below the median estimate of 185,000, the Department of Labor reported Friday. However, the national unemployment rate dipped to 3.7%, the lowest since 1969.
Average hourly earnings, a proxy for wage inflation, climbed 2.8% year-over-year, official data showed.
Government bond yields continued to rise in the final trading session of the week, with the 10-year note yield hitting 3.24%. That’s the highest since 2011.
The Final Word: The latest jobs numbers reaffirm the Federal Reserve’s interest rate path. Fed officials are widely expected to raise interest rates in December for a fourth time this year, a move that could send bond yields sharply higher.