US Stocks – Wall Street ends lower as explosive jobs data spooks traders

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US job growth in December exceeds expectations

Walgreens beats first-quarter profit, records best day since 1980

Constellation brand declines following downward revision of fiscal year forecasts

University of Michigan survey finds consumer sentiment is declining

Stock index decline: Dow 1.63%, S&P 1.54%, Nasdaq 1.63%

Written by Johan M. Cherian, Sukriti Gupta, Karolina Mandl

Jan 10 (Reuters) – U.S. stocks sold off on Friday as strong jobs data raised fresh inflation concerns and increased expectations that the Federal Reserve will be cautious about cutting interest rates this year. As a result, the S&P 500 Index wiped out its gains in 2025.

Wall Street’s major indexes ended in the red for the second consecutive week.

“This year got off to a false start,” said Sam Stovall, market strategist at CFRA Research, commenting on the impact of the stronger-than-expected jobs report on stocks. He added that the equity environment could be “pretty challenging.”

The Dow Jones Industrial Average fell 696.75 points, or 1.63%, to 41,938.45, the S&P 500 fell 91.21 points, or 1.54%, to 5,827.04, and the Nasdaq Composite Index fell 317.25 points, or 1.63%, to 19,161.63.

The small-cap Russell 2000 index, which is dominated by domestic stocks, also fell 2.27%, falling 10.4% from its closing high on November 25th and falling into correction territory. Wall Street’s fear level hit a three-week high Friday.

Job growth unexpectedly accelerated in December as the labor market ended the year on a strong note, while the unemployment rate fell to 4.1%, according to a Labor Department report.

Higher-than-expected employment growth could lead to faster economic expansion, leading to higher prices. The Fed may be forced to take a more conservative stance on rate cuts this year to rein in inflation, which remains high.

Traders expect the central bank to lower borrowing costs for the first time in June, then remain flat for the rest of the year, according to CME Group’s FedWatch tool.

Securities firms are also revising their forecasts for Fed rate cuts, with BofA Global Research predicting a potential rate hike.

But Chicago Fed President Austan Goolsby said there was no evidence the economy was overheating again, adding that he still expected further rate cuts were appropriate.

Pressuring stock prices, the 30-year U.S. Treasury yield hit 5%, its highest level since November 2023, but retreated slightly to 4.966%.

Most of the 11 industries in the S&P 500 index fell, except for the energy index, which rose 0.34%.

According to a University of Michigan survey, consumer confidence in January dropped to 73.2 from the previous month, adding to the recessionary mood.

The Fed last month issued a cautious outlook for monetary easing as renewed inflation concerns gained attention and policy changes on trade and immigration are expected under President-elect Donald Trump, who is expected to take office in 10 days. I had no choice but to do it.

Investors will be closely monitoring the release of the monthly consumer price index on January 15th, and a better-than-expected result could lead to further volatility.

“All of a sudden, the market is selling off significantly because the Fed is likely to be in a position to not only support the market by not cutting rates, but actually raising rates,” said Bryant Bankronkite, senior portfolio manager at Allspring. Probably.”

Semiconductor stocks including Nvidia fell about 3%, weighed down by reports that the U.S. could announce new export restrictions as early as Friday.

Constellation Energy soars 25.16% after agreeing to buy privately held natural gas and geothermal company Calpine for $16.4 billion, while Constellation Brands lowers annual sales and profit forecasts Following the correction, the stock fell by 17.09%.

Walgreens Boots Alliance rose 27.55% after reporting strong quarterly earnings.

Declining issues outnumbered advancing issues by a ratio of 4.24 to 1 on the New York Stock Exchange and 3.32 to 1 on the Nasdaq.

The S&P 500 Index posted 6 new 52-week highs and 32 new lows, while the Nasdaq Composite recorded 39 new highs and 211 new lows.

Trading volume on U.S. exchanges was 16.24 billion shares, compared to an average of 12.31 billion shares traded over the past 20 trading days.

(Reporting by Johann M Cherian and Sukriti Gupta in Bengaluru and Carolina Mandl in New York; Editing by Maju Samuel)