US Stocks Sink On NFP Data

US stocks fell on Friday as Wall Street weighed the government’s monthly employment report, which revealed how labour conditions remained tight in September, despite a slowdown in hiring; a sign the Fed will proceed with aggressive monetary tightening.

The US economy added 263,000 jobs last month as the unemployment rate fell to 3.5%. Economists expected a payroll gain of 255,000 and for unemployment to hold at 3.7%.

The S&P 500 retreated 2.1%, while the Dow Jones Industrial Average lost 450 points, or 1.5%. The Nasdaq Composite was leading the downtrend, losing nearly 3%. In the bond market, Treasury yields spiked, with the benchmark 10-year note topping 3.8% and the rate-sensitive 2-year yield at nearly 4.3%.

The market is getting more nervous on the negative reaction may be a sign that investors see no potential change in the Fed’s aggressive stance in the near term, given that next Fed decision is not until early November, so much more data will need to be digested, most importantly the CPI data expected on Thursday, October 13.