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US market trades lower on a payroll day

Predictions that the Federal Reserve will continue raising interest rates to fight inflation were strengthened by the November payrolls report.

Stocks fell after jobs report hinting more rate hikes

The November payrolls report fuelled predictions that the Federal Reserve would prolong its course of interest rate hikes to combat inflation. This led to a decline in US stocks on Friday, despite major indexes rising from their lowest levels.

According to the Labor Department’s jobs report, nonfarm payrolls increased by 263,000, exceeding estimates of 200,000. Wage growth surged despite growing recessionary concerns. As was predicted, the unemployment rate in the United States stayed at 3.7%. Investors have been watching for indications of labor market weakness, particularly in the area of wages, as this might signal a faster cooling of inflation.

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The Nasdaq Composite sank 85.66 points, or 0.75%, to 11,396.79. The S&P 500 lost 21.92 points, or 0.54%, to 4,054.65, and the Dow Jones Industrial Average dropped 99.32 points, or 0.29%, to 34,295.69. The S&P 500 and Nasdaq were expected to post gains for a second straight week despite Friday’s dip. The Dow had slight losses for the week.

Out of the 11 key S&P 500 sectors, shares of information technology were hit the hardest by selling pressure, falling 1.23% as the day’s poorest performer. Concerns about rising rates put pressure on growth and technology businesses like Apple Inc. and Amazon, which both experienced losses of 1.36%. S&P 500 Growth Index decreased by 0.79%. Ford Motor Co fell 2.13% as a result of November’s lower car sales.

Oil closes in red despite a green week

Despite a 5% weekly rise for the West Texas Intermediate, and a 2% weekly gain for the London-traded Brent, crude futures were headed for a lower settlement on Friday. For oil bulls depressed by WTI’s 19% decline over the previous three weeks and Brent’s 16% decline over the same time frame, the weekly gains alone should have been cause for rejoicing.

The final price of WTI crude for January delivery was $79.98 per barrel, down $1.24 or 1.5% from the previous day. Brent crude for February was trading at $85.72 per barrel, down $1.16 (or 1.3%) from Thursday.

Read more: Silver corrects this week’s gains after US jobs data

After the publication of another positive monthly U.S. jobs report, gold fell back into familiar $1,700 territory. However, before Friday’s close, gold futures had risen back to their newly established $1,800 as market bulls bet on a smaller Federal Reserve rate hike over the following two weeks.

In essence, gold declined for the day but increased sharply for the week nevertheless. On Friday, the benchmark February contract for gold futures closed at $1,809.60 an ounce. This is down $5.60 or 0.3%. But for the week, it increased by 3.1%. The spot price of gold, which some traders track more closely than futures, stayed just below the $1,800 threshold, trading at $1,799.03 an ounce.

Dollar etched higher on jobs report, however correction tamed the gains

The dollar’s ride Friday on the strength of the November jobs report ran out of gas. The bears aren’t likely to continue to pressure the greenback for very long as the Fed gets ready to raise rates again.

The trade-weighted U.S. dollar index, which compares the dollar to a basket of six major currencies, decreased by 0.04% to 104.65, dropping from its session high of $105.56.

EUR/USD closed the session almost where it started with only a 0.14% gain to 1.0536. Which is pretty good considering the price was under 1.0 a month ago. The Japanese Yen lost its footing. Closing at 134.31 which is 0.97 or 0.71% lower than a day before. 

Tomáš is a financial reporter with US markets as his main field. Tomáš is an aspiring author and entrepreneur aspiring to help people get better in financial knowledge.

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