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(Bloomberg) — Wall Street’s historic weekly run came to a halt, with stocks hit by a tech selloff and higher bond yields as a solid jobs report added to bets the Federal Reserve’s next 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 inflation risks are already challenging the Fed. The S&P 500’s nearly 2% drop prevented the index from notching a 10th straight week of gains. The Nasdaq 100 sank over 3%, the most since October. Two-year yields jumped 12 basis points to 4.16%. Swaps are fully pricing in a rate increase by the end of 2026. Bitcoin briefly fell below $60,000.
The repricing of the Fed outlook took hold as markets also reassessed the artificial-intelligence trade that had led a surge from this year’s lows. This follows an impressive earnings season for AI companies, with investors questioning whether growth rates have peaked, according to Mark Hackett at Nationwide.
“We find ourselves facing another strong pullback in tech,” said veteran strategist Louis Navellier. “It appears to be a case of profit-taking in the semiconductors. Also hitting the market today are higher interest rates. It’s due to very strong job data, lowering expectations for a Fed rate cut.”
