The Dow Jones Industrial Average closed lower on Friday (Jan 7) and dropped in the first week of the new year. As investors sell their shares amid concerns about the prospect of raising interest rates in the United States. and the spread of the COVID-19 virus Omicron species
The Dow Jones Industrial Average closed at 36,231.66, down 4.81, or -0.013 percent, the S&P 500 closed at 4,677.03, down 19.02, or -0.41%, and the Nasdaq closed at 14,935.90, down 144.96, or -0.96%.
In the first week of this new year The Dow was down 0.3%, the S&P500 was down 1.9 percent and the Nasdaq was down 4.5 percent, its biggest weekly decline since February. 2021
New York Stock Exchange fell. After the latest US employment report reinforces investor concerns that The US Federal Reserve (Fed) will speed up interest rate hikes to curb inflation.
Investors expected The Fed will continue to move forward with its interest rate hike plans. And cut the amount of the bond-buying program under the quantitative easing (QE) measure, despite the US Department of Labor’s disappointing non-farm payrolls on Friday (Jan 7), adding only 199,000 jobs in December. c. That was 422,000 lower than analyst expectations.
However, the employment report indicates rising inflation. and improving economic conditions The average hourly wage of workers rose 0.6% month-on-month and 4.7 percent year-on-year. which was higher than analysts had expected. The unemployment rate dropped to 3.9 percent, the lowest level since February. 2020 and below analyst expectations of 4.1%.
Minutes of the Fed’s Dec. 14-15 meeting released on Wednesday (Jan. 5) indicate that The Fed sees a very tight labor market. and signal that The Fed may have to raise interest rates earlier than expected to curb inflation.
Luxury and tech stocks on the S&P 500 index led the market lower. while the financial group and the banking group continued to rise. This was driven by rising US bond yields. The yield on 10-year bonds hit their highest level since January. 2020
Investors are also worried about the rising number of Omicron cases in the United States.
Investors have sold stocks in growth groups such as technology groups. and to buy value stocks which are expected to be better adjusted in the high interest rate environment.
The energy stocks in the S&P 500 index rose sharply this week.
For the next week’s trading Markets may be affected by inflation reports from the Consumer Price Index and Producer Price Index, retail sales and US industrial production data. It included a statement from Fed Chairman Jerome Powell to the Senate Banking Committee on Powell’s nomination for a second term as Fed chairman.
