NEW YORK (AP) — U.S. stocks are recoiling on worries that good news on the job market may be too good and prove to be bad for Wall Street by keeping inflation and interest rates high. The S&P 500 was down 0.9% early Friday. The Dow Jones Industrial Average fell 331 points, or 0.8%, and the Nasdaq composite was 1% lower. Treasury yields leaped in the bond market after the Labor Department reported that U.S. employers added many more jobs to their payrolls last month than expected. A hot jobs market could keep upward pressure on inflation and further delay interest rate cuts.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
U.S. stock futures quickly tumbled after the government said U.S. employers added a stronger-than-expected 256,000 jobs in December. Economists were expecting hiring to increase by 153,000.
Futures for the S&P 500 fell 0.8%, while futures for the Dow Jones industrials dropped 0.7%. Nasdaq futures were down 1%.
The solid jobs numbers could mean the Federal Reserve will remain reluctant to cut interest rates in the coming year. The Fed has already trimmed its forecast to two cuts in 2025, from a previous four.
U.S. markets were on Thursday to observe a for former
Treasury yields soared on the strong U.S. jobs report, with the yield on the 10-year climbing to 4.79%. It was below 3.65% in September. The yield on the 2-year Treasury jumped to 4.38% from 4.29%.
A recent run-up in Treasury yields has weighed on stocks. Higher yields make it more expensive for companies and households to borrow and offer investors a lower risk place to put their cash compared with the generally more volatile equities markets.
Shares of insurance companies fell on fears the wildfires ravaging the Los Angeles area will hit their profits. Allstate is down 4.7%, while Travelers is lower by 4%.
Delta Air Lines rose 7.5% after the carrier in the fourth quarter on strong demand during the crucial holiday period. United Airlines is up 6.7%.
Shares of Constellation Energy are up 10.3% after the power generation company said it in a cash-and-stock deal for $16.4 billion.
Markets in Asia saw a broad decline that analysts said reflects weakening confidence about the chances of further interest rate cuts by the given recent data showing unexpected strength in the U.S. economy.
Uncertainties over how aggressively President-elect Donald Trump might pursue higher tariffs against China and other countries once he takes office also have left investors cautious just days ahead of the Jan. 20 inauguration.
“Increased tariffs against Chinese goods are a given, but it is unclear which other economies in the region will be targeted and whether universal tariffs are still on the table,” ANZ Research said in a report.
Germany’s DAX was flat at 20,316.29, while the CAC 40 in Paris slipped 0.1% to 7,486.82. In London, the FTSE edged 0.1% lower, to 8,312.55.
In Tokyo, the Nikkei 225 index lost 1.1% to 39,190.40, while South Korea's Kospi shed 0.2% to 2,515.78.
Chinese markets extended losses, with the Hang Seng in Hong Kong down 0.9% at 19,064.29. The Shanghai Composite index fell 1.3%, to 3,168.52.
In Australia, the S&P/ASX 200 gave up 0.4% to 8,294.10.
Bangkok's SET rose 0.3%, while the Sensex in India dropped 0.3%. Taiwan's Taiex slipped 0.3% higher.
In other dealings early Friday, U.S. benchmark crude oil soared $2.87 to $76.79 per barrel. Brent crude, the international standard, climbed $2.83 to $79.75 per barrel.
The U.S. dollar rose to 158.77 Japanese yen from 158.14 yen. The euro dipped to $1.0233 from $1.0301.
Elaine Kurtenbach And Matt Ott, The Associated Press
