Stocks fall on hotter-than-expected November jobs report, as Dow slides more than 300 points

Stock futures fell on Friday as investors digested hotter-than-expected jobs data, unnerving investors looking for signs the Federal Reserve could start slowing rate hikes.

Futures related to the Dow Jones Industrial Average fell 383 points, or 1.1%. S&P 500 and Nasdaq-100 futures lost 1.4% and 1.9%.

Nonfarm payrolls rose 263,000 in November, greater gain than the 200,000 increase expected by economists polled by Dow Jones. The unemployment rate held steady at 3.7%.

Treasury yields jumped while stocks fell as investors digested the data, which was being watched closely with employment seen as a relatively stubborn area of ​​the economy that has not clearly shown the effects of past interest rate increases. Investors were hoping for a number low enough to indicate a downturn in the labor market, while strong enough to indicate that the United States could avoid a recession.

“The supply of workers remains low, and the demand for workers remains high,” said Michael Aron, chief investment analyst at State Street Global Advisors. “This means that wage inflation will remain flat and that is a problem for equities going forward because it is likely to keep the Fed hawkish rather than dovish.”

Friday’s report is the final monthly employment report before the Fed’s two-day meeting on Dec. 13-14, at which the central bank is expected to raise the federal funds target rate by half a percentage point. An increase of 50 basis points would indicate a slowdown from the previous 75 basis point rate hike set by the central bank.

Federal Reserve Chairman Jerome Powell appeared Confirms slowing price hikes on the horizon in a speech on Wednesday, indicating that the decline could begin as early as this month. Stocks rose, with the Dow Jones rising more than 700 points, following his remarks.

On Thursday, the Dow closed down about 195 points as traders looked to reduce exposure ahead of the jobs data. The S&P 500 was down 0.09% on Thursday, while the heavy Nasdaq Composite was up 0.13%.

Thursday’s moves came on the heels of a mixed batch of economic data, including a Basic personal consumption expenditure report It was slightly better than expected on a monthly basis and a larger than expected decline in the ISM Manufacturing Index. The so-called PCE deflator is one of the Fed’s favorite measures of inflation.