Wall St tumbles again as strong jobs growth fuels rate hike fears

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U.S. stock indexes extended losses for a second day on Friday as elevated U.S. Treasury yields dragged growth shares after stronger-than-expected jobs data amplified investor fears of bigger interest rate hikes to tame surging prices.

The Labor Department's report showed nonfarm payrolls increased by 428,000 jobs in April, while economists polled by Reuters had expected 391,000 job additions.

Unemployment rate remained unchanged at 3.6% in the month, while average hourly earnings increased 0.3% against forecast of a 0.4% rise. The data underscored the economy's strong fundamentals despite a contraction in gross domestic product in the first quarter.

"Wage growth came in slower and below expectations... but one month does not yet make a trend consistent enough for the Fed to slow its monetary tightening intentions." Nine of the 11 major S&P sectors declined in early trading, with consumer discretionary sector down 1.7%.slid 1.6%, adding to a near 5% drop in the previous session, as investors feared bigger rate hikes might be announced as inflation runs at a four-decade high.

Traders see a 75% chance of a 75 basis point hike at the Fed's June meeting, despite Fed chief Jerome Powell ruling it out.

 

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