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(Bloomberg) — Wall Street’s historic weekly run is poised to come to a halt, with stocks and bonds falling after a solid jobs report added to speculation the Federal Reserve’s next interest-rate move will be a hike.
While there was a lot to like in Friday’s economic data, the figures came at a time when war-fueled inflation risks are creating a challenge for the Fed. The 1% drop in the S&P 500 prevented the index from completing a 10th straight week of gains, with a tech rout weighing heavily on trading. Treasury two-year yields rose 10 basis points to 4.14%. Swaps are fully pricing in a rate increase by the end of 2026.
US job growth topped all forecasts in May and the unemployment rate held steady at 4.3%, offering the clearest sign yet that the labor market may be breaking out of a prolonged period of lackluster hiring.
The jobs surprise underscores ongoing economic resilience, but it will also likely keep the Fed — and markets — focused on price pressures, noted Ellen Zentner at Morgan Stanley Wealth Management.
