NEW YORK (AP) — Stocks fell on Friday as Wall Street weighed how the latest data on the U.S. jobs market would read and hopes the world’s second-largest economy could be set for a boost.
The S&P 500 was 0.1 percent higher in afternoon trade after paring gains from as high as 2.1 percent earlier. The index’s big swing follows a U.S. government report showing the unemployment rate rose in October and employers added fewer jobs than a month earlier. Perhaps even more key for the market was that average growth for workers also slowed last month.
The data offers some hope that the Federal Reserve’s deliberate efforts to weaken the job market may be starting to take effect and help reduce the nation’s high inflation. The recession, however, was more modest than economists had expected. And it changed very few minds, if any, about what happens next on Wall Street: The Fed will raise interest rates to levels rarely seen this millennium, moves that will further brake the economy and drag down the value of stocks and other investments. .
As Wall Street chewed on the jobs report, markets around the world rallied amid continued speculation that China could relax its zero-COVID strategy and strengthen what has long been a key source of growth for the global economy.
The Dow Jones Industrial Average was up 31 points, or 0.1 percent, at 32,038, as of 12:15 a.m. ET, and the Nasdaq Composite was down 0.1 percent. The Russell 2000, which tracks small company stocks, fell 0.2 percent.
Fed Chairman Jerome Powell earlier this week cited a still-hot jobs market as one of the reasons the central bank may eventually have to raise rates higher than previously thought. That raised expectations for Friday’s jobs report, but the data was mixed enough that Wall Street couldn’t agree on its takeaway.
News Wrap: Fear of a recession causes the stock market to sell off
Some analysts pointed to a slight increase in the unemployment rate to 3.7 percent in October. That raised the possibility that September’s 3.5 percent rate could prove lower. Big tech companies like Amazon have recently announced layoffs or job cuts to keep pace with what they see as a weak economy. This can keep the economy away from the dreaded “wage-price spiral,” where a large jump in wages and a strong job market trigger a vicious cycle that drives inflation higher.
Others, however, are still focused on a hot job market where hiring continues to meet high expectations. If anything, Friday’s jobs data likely means “Fed officials will have to step on the brakes even harder to slow the economy and bring inflation under control,” according to Russell Price, Ameriprise chief economist.
Many investors and banks raised their expectations on Friday about how the Fed will eventually raise short-term interest rates next year, with many eyeing something above 5 percent after starting the year at zero.
At fund behemoth Vanguard, the investment strategy group said all the data together “does nothing to change Vanguard’s Fed expectations” and focused only on next week’s update on how bad inflation was across the country in October.
Markets around the world wobble in the minutes immediately following the release of US jobs data, one of the most anticipated reports on Wall Street each month. The yield on the two-year Treasury, which tends to track expectations for action by the Fed, bounced up and down a few times before finally easing.
Markets were higher earlier in the day, on hopes that China could soon relax anti-Covid policies that have sometimes shut down entire cities for weeks.
Such a move could provide a major boost to the global economy at a time when aggressive interest rate hikes by central banks from the US to New Zealand are raising fears of a global recession.
Hong Kong stocks rose 5.4 percent on Friday, while stocks in Shanghai gained 2.4 percent. On the last day of the week, both the markets achieved high growth.
The price of copper also increased by 7.2 percent. A stronger Chinese economy eats up more raw materials, and shares of miner Freeport-McMoRan rose 9.5 percent, the biggest gainer in the S&P 500.
Two casino companies that derive much of their revenue from the gambling hub of Macau on China’s southern coast were also among Wall Street’s strongest stocks. Las Vegas Sands climbed 4.1 percent, and Wynn Resorts added 4 percent.
Stocks across Europe also rose. France’s CAC 40 rose 2.4 percent, and Germany’s DAX retreated 2 percent.
The two-year Treasury yield fell to 4.71 percent from 4.72 percent late Thursday. The 10-year yield, which helps determine rates for mortgages and other loans, rose to 4.16 percent from 4.15 percent.
AP Business writers Yuri Kageyama and Matt Ott contributed.