Investing.com – The Dow posted its sixth-weekly loss Friday, as a better-than-expected monthly jobs report kept fears about an inflation-led slowdown in the economy front and center at a time when expectations of more aggressive Federal Reserve policy tightening continue to heat up.
The Dow Jones Industrial Average slipped 0.5%, or 21 points, the S&P 500 fell 0.5%, and the Nasdaq fell 1.4%.
Nonfarm payrolls increased 428,000 in April, above consensus expectations for 391,000 new jobs, while the unemployment rate was unchanged at 3.6%.
Wage growth slowed to 0.3% for the month, but economists continue to forecast wages to resume their uptrend amid a tight labor market.
“We still expect the unemployment rate to drop to 3% by year-end, and wage inflation to accelerate toward 6%, which in turn will put a floor under inflation around 3.5-4%,” Jefferies said in a note.
Inflation is expected to trend above the Fed’s 2% target for some time, exacerbating investor worries about the impact on the consumer, which makes up about two thirds of economic growth.
“Fed Chairman Powell was hopeful that he could derail inflation without a “significant” increase in unemployment,” Diane Swonk, chief economist at Grant Thornton, said in a note. “Hope is not the same as reality.”
Tech stocks, which suffered a rout a day earlier, continue to come under pressure from rising Treasury yields as investor bets on more aggressive Fed monetary policy tightening continue to heat up.
Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT, Amazon (NASDAQ:AMZN), and Meta (NASDAQ:FB), were down more than 1%. Apple (NASDAQ:AAPL) bucked the trend to trade above the flatline.
Materials were also a big drag on the broader market, led by Vulcan Materials (NYSE:VMC), Corteva (NYSE:CTVA) and Ball Corporation (NYSE:BLL) with the latter down more than 6% following negative commentary on the stock from Wall Street.
“We are downgraded BLL [Ball Corporation] to sector perform rating from an outperform given inflationary cost pressures in EMEA, the suspension of its Russian operations and weakness in Brazil,” RBC said as it cut its price target on the stock to $81 from $100.
Under Armour (NYSE:UAA), meanwhile, plunged more than 23% after reported a surprise loss and guidance that fell short of estimates as supply chain woes continues to weigh on growth.
DraftKings (NASDAQ:DKNG) fell more than 8% after paring gains even as the sports betting company reported quarterly results that beat on both the top and bottom lines.
Energy stocks sidestepped the broader trend lower as oil prices climbed as supply fears persist as the European Union tweaked its Russian oil embargo plans to allow Hungary, the Czech Republic, and Slovakia more time to implement the ban. The EU is expected to reach a decision on its Russian oil embargo plan this weekend.
In other news, Peloton Interactive (NASDAQ:PTON) slipped more than 7% following a Wall Street Journal report that the connected fitness equipment company is looking to sell a 15% to 20% stake to bolster its balance sheet.