US stocks fell on Monday, with technology stocks dragging the Nasdaq below other indices, after the release of the jobs report on Friday showed continued strength in the job market.
At 12:05 pm ET, the S&P 500 (^GSPC) fell 0.7%, while the Dow Jones Industrial Average (^DJI) fell 0.2%. The tech-heavy Nasdaq Composite (^IXIC) fell 1.1%.
Government bond yields were higher. The yield on the 10-year note rose to 3.42%, while the yield on the two-year rate-sensitive note rose to 4.01% on Monday morning.
Crude oil (CL=F) continues to hover around $80 a barrel for the sixth day in a row, the first time it has done so since late January.
Wall Street wrapped up a short but volatile week last Thursday, ending on a modestly upbeat note ahead of Friday’s jobs report. Stocks wobbled earlier in the week in response to signs of an economic slowdown, including weak data on private payrolls and job openings.
The stock market was closed for Good Friday. Still, the Labor Department reported Friday that nonfarm payrolls rose by 236,000 in March, slightly below consensus estimates of 240,000 and down from a revised 326,000 in February. The unemployment rate held steady at 3.5%, while the labor force participation rate rose to a post-COVID-era high of 62.6%.
Hourly earnings rose 0.3% compared to the February figures. The annual gain cooled to 4.2%, down from 4.6% in February.
“The March jobs report suggests the US labor market is moving towards a healthier equilibrium, as weaker job growth and cooler wage inflation suggest we are nearing the end of the raise cycle. of Fed rates,” wrote Ryan Sweet, chief US economist at Oxford Economics. after Friday’s report.
Following the statement, markets are now pricing in a 65% chance that the Federal Reserve will raise interest rates another 0.25% in May, according to CME Group data.
Meanwhile, this week Wall Street will be paying close attention to the March Consumer Price Index report due on Wednesday. Economists surveyed by Bloomberg expect the index to rise 0.3% from February, which would bring the year-on-year headline inflation rate to 5.2%.
“Thinking about the near-term setup, investors remain bearish, and the recession narrative was the dominant narrative last week as bad news was treated as bad news,” the US market intelligence team wrote. US at JPMorgan in a note. “The CPI printout should give more certainty about the terminal rate.”
Minutes from the Fed’s late-March meeting will be released on Wednesday, providing more insight into the central bank’s policy moves.
Another potential catalyst for the markets could come at the end of the week. Some of the banking heavyweights including Wells Fargo (WFC), JPMorgan (JPM) and Citi (C) will report earnings.
Against this backdrop, business loans have fallen by more than $100 billion in the last two weeks of March, the largest drop on record, raising the focus on bank earnings this week.
On the economic front, wholesale inventories were $919.2 billion at the end of February, up 0.1% from the January level and below consensus estimates of 0.2%. Sales for the month increased 0.4%, below the expected increase of 0.6%, the Commerce Department reported.
On the other hand, households project inflation a year from now to stand at 4.7% compared with February’s reading of 4.2%, the first increase since October, according to a report from the Household Expectations Survey. New York Fed Consumer March.
Meanwhile, New York Fed President John Williams is expected to participate in a moderated discussion hosted by The Economics Review at New York University on Monday.
In individual stock moves, shares of Tesla, Inc. (TSLA) fell after the electric vehicle maker confirmed plans to build a major battery production site in Shanghai.
Shares of Pioneer Natural Resources Company (PXD) soared after a report in The Wall Street Journal suggested Exxon Mobil was in talks with the shale driller about a possible acquisition.
Shares of Apple Inc. (AAPL) fell on Monday morning after the company reported that its shipments of personal computers plunged 40% in the first quarter, signaling a bumpy start to the year for manufacturers. of pc.
Shares of Micron Technology, Inc. (MU) rose after Samsung Electronics said it plans to make significant cuts in chip production amid hit prices across the industry.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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