Stocks wobbled on Friday as traders fought to overcome worries that the Federal Reserve may start hiking rates again. All the major averages headed for a week of losses, however.
The S&P 500 was little changed, while the Nasdaq Composite rose 0.1%. The Dow Jones Industrial Average lost 110 points, or 0.3%.
All three major averages are headed for a losing week. The S&P 500 is off by about 0.6%, while the Nasdaq is on pace for a 0.3% decline. The Dow is the underperformer of the three, tracking for a 1.5% loss.
The Labor Department’s June jobs report showed payrolls increased less than expected, cooling down from May. Nonfarm payrolls rose by 209,000, while the unemployment rate came in at 3.6%. Economists polled by Dow Jones had anticipated 240,000 positions added and a similar jobless level.
But parts of the report, including stronger-than-expected wages numbers, heightened fears that the central bank may have reason to resume hiking later this month. Average hourly earnings increased by 0.4% in June and 4.4% from a year ago. Meanwhile, the unemployment rate declined from 3.7% in May.
“It’s kind of a mixed picture today,” said Truist’s Keith Lerner. “It’s good news that the economy is not falling apart, it’s still chugging along, but you still have these wage pressures that are going to keep the Fed likely to raise rates at the end of the month.”
Near term, Lerner said equities are ripe for a pullback following a big June and second quarter. This could lead to consolidation and choppy action as markets head into earnings season.
Following Friday’s big data release, traders kept their bets on a resumption in hiking later this month, pricing in a 92% chance of a quarter-point hike on July 26. That’s about the same odds as a day ago, according to CME Group‘s FedWatch tool. Policymakers indicated at their June gathering that two more rate hikes could be ahead in 2023.