You’d think the Labor Department’s employment report on Friday about the addition of 390,000 jobs to the US economy for May would be welcomed news for everyone.
But the reaction from US stock market traders was just the opposite.
U.S. stocks resumed their trend of weekly losses as investors weighed May’s strong hiring data and what it could mean for the Federal Reserve’s aggressive rate hiking cycle.
The general sentiment is that the jobs data cleared the way for the Federal Reserve to proceed with tightening monetary conditions further by raising interest rates — a point of worry for investors who fear central bank policies may tip the economy into a recession.
Friday’s sell-off was led by tech stocks, with the Nasdaq Composite falling 2.5%. The S&P 500 fell 1.6%, while the Dow Jones Industrial Average shed 350 points or 1%.
At the close of the week, the S&P was down 0.17%, the Dow down 0.03% but the Nasdaq gained 0.36%.
The weekly performance of the S&P 500 and the Dow reversed a previous week of gain the indexes had a week earlier. However, in Jamaica, the market was back on an upward trajectory.
The outlook for the weeks ahead isn’t looking too positive, so keep a tight handle on your wheeling and dealings.
In Friday’s session, shares of Tesla (TSLA) closed down more than 9% to $703.55 per share after Reuters reported CEO Elon Musk warned of a “super bad feeling” about the economy and said the company is expected to trim about 10% of salaried jobs in an email to executives.
Musk also motioned management to “pause all hiring worldwide” in the note. Musk’s warning comes just days after JPMorgan Chase (JPM) boss Jamie Dimon cautioned of a “hurricane” bearing down on the U.S. economy.