NEW YORK (AP) — Stocks are opening lower and bond yields are rising as yet another report of robust hiring suggests the Federal Reserve will need to keep pressing the fight against inflation and cool off the economy with higher interest rates. U.S. employers added 428,000 jobs in April, more than expected, and wages grew 5.5% from a year ago. A historically tight labor market has been worrying investors that the Fed has a tough slog ahead to prevent inflation from getting out of control. The S&P 500 fell 1.2%. Stocks are on track for weekly declines after a turbulent few days of both huge gains and losses.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Wall Street appeared headed for another selloff Friday, putting a cap on a volatile week in U.S. markets as fears spread that U.S. interest rate hikes to fight inflation might stall economic growth.
Futures for the Dow Jones Industrial Average slid 0.4% and the same for the S&P 500 fell 0.5% as investors await what's expected to be another strong U.S. jobs report.
On Thursday, the S&P 500 index plunged 3.6%, the Dow lost 3.1% and the Nasdaq slumped 5% as optimism that drove the previous day’s rally evaporated.
Investors worry about whether the Federal Reserve, which raised its key interest rate by a half percentage point on Wednesday, can cool inflation without tipping the U.S. economy into recession. Traders were briefly encouraged by chairman Jerome Powell’s comment that the Fed wasn’t considering even bigger increases.
“Clearly, investors had second thoughts about the so-called ‘dovish hike’ from the Fed,” Rob Carnell of ING said in a report. The likelihood is “rate hikes coming thick and fast, but little if any prospect of a turn in inflation any time soon.”
In midday trading, the FTSE 100 in London lost 0.6%, Frankfurt's DAX sank 0.9% and the CAC 40 in Paris shed 1.1%.
Also Friday, the U.S. government was due to report employment data. For the past year, America’s job market has added an impressive average of 540,000 workers a month despite a punishing inflation rate, war, a pandemic and the prospect of much higher borrowing costs.
Hiring gains have topped 400,000 every month since May 2021. Most economists think the winning streak will continue. According to a survey by the data firm FactSet, they expect Friday’s jobs report for April to show that employers added 400,000 more jobs last month and forecast that the unemployment rate held at a historically low 3.6%.
In Asia, the Shanghai Composite Index fell 2.2% to 3,001.56 and Hong Kong's Hang Seng plunged 3.8% to 20,001.96. The Nikkei 225 in Tokyo added 0.7% to 27,003.56.
The Kospi in Seoul tumbled 1.2% to 2,644.51 and Sydney's S&P-ASX 200 lurched down 2.2% to 7,205.60.
India's Sensex lost 1.5% to 54,880.33. New Zealand and Southeast Asia markets also declined.
In premarket trading, shares in Under Armour tumbled 18% after the athletic wear company reported a surprise loss last quarter.
Oil prices stayed above $100 per barrel despite a decision Thursday by major oil producers to increase exports. European governments are considering an embargo on Russian oil and are trying to line up other supplies in a tight market.
Benchmark U.S. crude gained $1.58 to $109.84 in electronic trading on the New York Mercantile Exchange. The contract rose 45 cents to $108.26 on Thursday. Brent crude, the price basis for international oil trading, advanced $1.80 to $112.70 per barrel in London. It rose 76 cents the previous session to $110.90 a barrel.
The dollar inched up to 130.45 yen from Thursday's 130.40 yen. The euro gained to $1.0570 from $1.0519.