Employment strength leads Wall Street to biggest fall since Fed hangover – Stock Exchange

The New York stock exchanges experienced a day of heavy losses this Friday, pressured by the unexpected strength of the North American labor market in December, which leads analysts to anticipate that the Federal Reserve (Fed) will only cut key rates this year.

Wall Street’s three main indexes ended falling more than 1.5%, their worst performance since December 18, the day the Fed indicated that the pace of monetary policy easing would slow down.

The Dow Jones fell 1.63%, to 41,938.45 points, while the S&P 500 fell 1.54%, closing at 5,827.04 points. The technological Nasdaq Composite lost 1.63% and closed at 19,161.63 points. The three indices have gone into a negative balance since the beginning of the year.

“It’s good news for the strength of the economy and bad news for those who expected interest rate cuts. Inflation will dominate the Fed’s agenda,” Neil Birrell of Premier Miton Investors told Bloomberg. “Any hopes of a peaceful start to the year have disappeared,” he concluded.

The falls affected not only the “small caps” – companies with smaller market capitalization – but also the giants, notably the magnificent seven.

Investors’ attention will now turn to the results of listed companies, with the large US banks showing their accounts for the last quarter next week, in the true start of the “earnings season”.