The New York Stock Exchange opened sharply lower on Friday, strained by American employment figures in December which exceeded expectations, suggesting a pause by the American Central Bank (Fed) in its rate cut.
Around 3:10 p.m. GMT, the Dow Jones fell 1.44%, the Nasdaq index tumbled 2.26% and the broader S&P 500 index dropped 1.71%.
“Sales are increasing in all asset categories after the publication of the employment report” published Friday before the opening of Wall Street, commented to AFP Adam Sarhan, of 50 Park Investments.
Job creation accelerated in December in the United States, leading to a slightly lower unemployment rate, undermining market expectations which, on the contrary, anticipated a slowdown in this area.
In the last month of the year, 256,000 jobs were created, an increase compared to the previous month, the figures of which were however revised slightly downwards (212,000 against 227,000 initially), bringing unemployment to 4.1 % (-0.1 point), according to data from the Department of Labor.
Economists expected 155,000 job creations, and a stable unemployment rate compared to the previous month, at 4.2%, according to the MarketWatch consensus.
“The main lesson that can be drawn from this report (…) is that it was perhaps too positive (…) which fuels the prospect of persistent inflation, because the labor market is still solid,” said Patrick O’Hare of Briefing.com in a note.
These figures could thus have “repercussions on the monetary policy of the Fed”, according to Adam Sarhan.
The Fed in fact monitors employment figures closely, because it has a dual mandate, requiring it to ensure both price stability, with a long-term inflation objective of 2%, and to guarantee a labor market as close as possible to full employment.
“We find ourselves in a situation where the Fed’s rate cut in December could be the last, in the near future,” summarized Mr. Sarhan, according to whom the figures “scared the markets and caused strong pressure on sale”.
In this context, on the bond market, the yield on ten-year US government bonds suddenly rose after the publication of the report, reaching up to 4.79%. It later eased slightly, settling at 4.74% around 2:55 p.m. GMT.
On the 30-year maturity, the 5% threshold was exceeded around 1:45 p.m. GMT, before falling back to 4.96%.
Elsewhere, on the stock market, the majority of sectors were moving in the red, weighed down by the publication of the employment report.
Only energy-related stocks managed to do well, driven by the surge in oil prices due to possible sanctions that the United States was preparing to take against the Russian “ghost fleet”, which which could have an impact on the Kremlin’s oil exports.
Chevron gained 2.04%, Exxon Mobil gained 1.42%, and ConocoPhillips, 1.32%.
The American Constellation Energy, a major operator of nuclear power plants in the United States, was in orbit (+22.95%) after announcing the takeover of its compatriot, the energy company Calpine, for nearly $27 billion including debt.
The operation will create the largest supplier of green energy in the United States, the press release argues, while the development of artificial intelligence leads to immense new electricity needs.
The American airline Delta Air Lines soared (+9.38%) thanks to better results than expected in the fourth quarter of 2024, helped by strong demand for leisure and business travel, which continues in the start of the current financial year, according to a press release published Friday.
The pharmacy giant Walgreens Boots Alliance was propelled (+24.67%) after publishing results above analysts’ expectations for the first quarter of its staggered financial year, ending November 30.
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