US stocks plunged on Friday following a stronger-than-expected jobs report, tempering Wall Street’s hopes for additional interest rate cuts by the Federal Reserve in the near term.
S&P 500, Nasdaq Composite and Dow Jones Industrial Average both fell 1.3%.
The major indexes have now entered negative territory in 2025. This shows the market’s vulnerability to the economic data.
According to the December Employment Report, US payrolls increased by 256,000, exceeding expectations of 155,000.
Contrary to expectation, the unemployment rate has dropped to 4,1%.
Following the publication of this report, 10-year Treasury yields soared up to their highest levels since 2023. This reflects increased investor caution.
Data that was robust shifted the expectations about Federal Reserve policy.
The CME FedWatch Tool shows that traders have now assigned a 97% chance to maintain the current rate at the January meeting.
In the same day, odds for a March rate reduction dropped from 41% to just 25%.
The University of Michigan’s Consumer Sentiment Index painted a mixed image, adding to the market’s concerns.
This reading was 73.2 in January, which is below the predicted 74.
The inflation expectation has risen, and the outlook for one year is now 3.3%, up from 2.8%. Meanwhile, projections over five years are at their highest level since mid-2008.
The sell-off was dominated by growth-oriented stocks, especially in the tech sector.
Nvidia fell 2.5%; AMD fell 5.2% and Broadcom dropped 2.1%.
Palantir lost over 1% as well. The Russell 2000 index, which is sensitive to the rising cost of borrowing, shed over 2%.
The three main indices will all be losing money this week.
S&P 500 has dropped 1.8%. Nasdaq Composite is down 2.4%. Dow Jones will likely drop 1.6% for the week.
The Federal Reserve policy path and the implications of it for market growth and stability will remain in the spotlight as the market adapts to changing economic conditions.
Walgreens shares soar 28% after impressive earnings report
Walgreens Boots Alliance’s shares rose nearly 28 percent on Friday, after it reported earnings and revenues that exceeded analyst expectations for the fiscal first quarter.
Walgreens, however, posted a $265 million net loss, which is 31 cents a share. This compares to the $67 million loss, or 8-cents a share in the previous year.
As part of a multi-year restructuring plan, the increased losses can be attributed to efforts made by the company to reduce costs and shut down underperforming shops.
Delta Air Lines’ shares rose 9% after better than expected fourth quarter results.
Air Canada reported earnings adjusted at $1.85 a share, on revenue of $14.44 Billion. This was higher than the forecast of $1.75 a share with $14.18 Billion in revenue.
Delta has also released a robust guide for the upcoming year.
Constellation Energy’s stock soared 24% following the announcement of a $26.6 Billion acquisition by Calpine, an oil and gas geothermal company.
Analyst estimates for the company’s adjusted full-year earnings were also higher than expected.
The insurers who were exposed to the devastation caused by California’s wildfires took a blow.
AIG, Travelers, and Allstate also saw their shares decline due to increasing insured losses.
The post US Stocks on Friday, January 10: Wall Street falls as robust job report fuels concerns about rate hikes may be updated as new developments unfold.
