Wall Street declines as rate rise fears are fueled by positive jobs data. from Reuters

Reuters. On August 3, 2022, a trader is seen at the New York Stock Exchange (NYSE) in Manhattan, New York City, United States. Andrew Kelly for Reuters by Davide Barbuscia and Devik Jain

— (Reuters) The major Wall Street indexes declined on Friday as a strong employment report strengthened the case for the Federal Reserve to proceed with interest rate hikes. Technology stocks took the brunt of the selloff.

The 19th consecutive month of payroll growth in the United States saw significantly more hiring than anticipated, and the unemployment rate dropped to a pre-pandemic low of 3.5%.

The study offered the clearest indication yet that there was no recession taking place in the economy.

“It is a huge number that opens the way for the Fed to keep hawkish perspectives that have recently been articulated. I believe the most likely September increase will be 75 basis points “Dean Smith, the company’s chief strategist, said.

“People felt such a great temptation to declare the end of inflation, but we are simply not there yet. The rate of inflation is accelerating rather than slowing down as it becomes more deeply ingrained.”

Growth index, which includes stocks in the technology and related industries, dropped as U.S. Treasury yields increased further following the report. Amazon.com (NASDAQ: AMZN) and Tesla (NASDAQ: TSLA) Inc. shares both saw declines of 2.2% and 1.3%, respectively.

This week, a number of decision-makers stated that the Fed would continue its aggressive policy tightening strategy until there was clear, convincing evidence that inflation was moving in the direction of its 2% target.

Since the release of the data, the probability of a 75 basis point rate increase in September has increased from 40% to 65.5%. This year, the central bank has already raised rates by 2.25 percentage points.

This year, concerns about rising borrowing prices, the conflict in Ukraine, Europe’s energy crisis, and COVID-19 flare-ups in China have roiled the stock market and forced experts to revise their projections for corporate America’s profitability.

However, following a disappointing first-half performance, a relatively positive second-quarter earnings season and a robust batch of economic data have helped the Sandamp;P 500 recover about 13.6% from its mid-June lows.

Ryan Detrick, chief market strategist at Carson Group, stated, “(Today’s report) is another good reminder that we are not in a recession and probably recession isn’t anywhere.”

No matter what the Fed’s stance is, “that’s probably still more of a positive thing than not… that’s still a huge tailwind for equities to continue to bounce back this year.”

At 9:45 a.m. ET, the Nasdaq Composite was down 135.90 points, or 1.07%, at 12,584.68; the Sandamp;P 500 was down 27.03 points, or 0.65%; and the Dow Jones Industrial Average was down 134.01 points, or 0.41%, at 32,592.81.

After reporting record quarterly earnings, Lyft Inc (NASDAQ: LYFT) increased 4.6% as the ride-hailing company projected an adjusted operating profit of $1 billion for 2024.
Block Inc experienced a 2.8% decline as a result of the digital payments firm’s quarterly loss due to declining demand for cryptocurrencies.
On the NYSE and the Nasdaq, declining issues outnumbered advancing issues by a ratio of 3.25 to 1 and 2.30 to 1, respectively.
While the Nasdaq registered 11 new highs and 28 new lows, the Sandamp;P index posted three new 52-week highs and 30 new lows.