Wall Street’s major indexes fell in choppy trading on Friday, with the Nasdaq falling more than 2%, as investors digested mixed economic data and grappled with uncertainty around the potential impact of the Omicron coronavirus variant.
After opening higher, Wall Street could not hold its gains for long. The Labor Department’s report, ahead of the session’s open, showed that while nonfarm job growth rose less than expected in November the unemployment rate dropped to 4.2%, the lowest since February 2020, and wages increased.
Separately, a measure of U.S. services industry activity hit a record high in November. Both sets of data appeared to influence investor expectations for the U.S. Federal Reserve’s next move towards tightening its policy. Fed Chair Jerome Powell said this week that the central bank will consider a faster wind-down of its bond-buying program, a move seen by some as opening the door to earlier interest rate hikes.
“The market may think the jobs report was strong enough to keep the Fed on its path for accelerating bond purchase tapering, said Shawn Snyder, head of Investment Strategy at Citi US Consumer Wealth Management.
Investors were viewing the data alongside reports about Omicron’s spread to dozens of countries without any clarity on the severity of the disease or the level of protection provided by existing COVID-19 vaccines.
