U.S. stocks were mixed after the January jobs report beat expectations, putting investors on edge about the path of monetary tightening by the Federal Reserve.
The S&P 500 opened flat. The tech-focused Nasdaq Composite gained 0.6%, and the Dow Jones Industrial Average fell 0.3%.
U.S. payrolls grew by 467,000 in January, the Labor Department said Friday. Economists surveyed by The Wall Street Journal had expected a gain of 150,000.
Major indexes Thursday saw losses after megacap technology companies helped drag the market down.
owner Meta Platforms in particular plunged after a disappointing earnings report.
Amazon.com
shares rallied 12% premarket after the e-commerce giant said profit nearly doubled in the critical holiday period, as the company controlled labor and supply costs better than expected and saw gains in its cloud-computing and advertising businesses.
Sharp moves in the share prices of large technology and social-media companies have an outsize impact on broader indexes. Amazon.com had a 3.3% weighting on the S&P 500 as of Wednesday, according to data from S&P Dow Jones Indices. Meta, whose shares tumbled Thursday, had a 2% weighting.
Global markets have been highly volatile in recent weeks.
Photo:
Allie Joseph/Associated Press
“Those companies which have continued to deliver strong results have held up relatively well,” said
Mike Bell,
global market strategist at J.P. Morgan Asset Management. “Those companies which were priced as heavily valued growth stocks, but then under-delivered, are getting hit extraordinarily hard.”
Snap shares surged about 39% premarket after the social-media company posted its first quarterly profit and signaled it is adjusting to disruptions in the digital-advertising market caused by
Apple
privacy policy changes that are affecting Meta.
jumped about 7% premarket after it reported its first full-year profit and more than $2 billion in annual revenue.
However,
Clorox
shares tumbled 15% premarket after the maker of disinfectant wipes and other cleaning products reported earnings that missed analysts’ expectations and said margins would take a steep hit from continued cost pressures.
Ford Motor
shares declined more than 6% premarket after the auto maker posted earnings that fell short of Wall Street forecasts.
In bond markets, the yield on the benchmark U.S. 10-year Treasury note climbed to 1.886% after the release of the jobs report, versus 1.825% Thursday. Yields and prices move inversely. Oil prices climbed, with global benchmark Brent crude up 1.8% at $92.77 a barrel, due to supply tightness and a winter storm in the U.S. that may disrupt production.
International markets have been volatile in recent weeks, and on Friday, the pan-continental Stoxx Europe 600 fell 1%. Markets have been rattled by the increasingly hawkish tone from global central banks. On Thursday, the Bank of England raised borrowing costs again, while the European Central Bank kept its key interest rates unchanged, but signaled concern about inflation and opened the door to a possible rate rise this year.
Annual inflation in the eurozone rose to a record 5.1% in January, more than double the ECB’s target. Some investors are betting on future rate rises to curb inflation, and are selling government bonds, pushing the yield on Italy’s 10-year debt up to 1.718% Friday, from 1.650% Thursday. In a sign of rising risk aversion, the spread between benchmark Italian and German government bond yields rose to its highest level since July 2020.
The Federal Reserve has also set the stage for a series of rate increases in 2022, leading investors to shift toward investments that are deemed safer, such as stocks of companies that pay regular dividends.
The market volatility could continue until the Fed implements its first interest-rate increase and investors get used to the idea of rising rates, said
Peter Andersen,
founder of Massachusetts-based investment firm Andersen Capital Management.
“The fact that everything is sold off wholesale is really, in my opinion, a buying opportunity,” Mr. Andersen said. “Every investor is so spooked now, and nobody really has a compass to figure out where exactly we are in this cycle.”
Since the start of this year, the Nasdaq Composite has lost more than 11%, while the S&P 500 has slid 6.1%. The Dow, in comparison, has fallen 3.4%.
In Asia, stocks in Hong Kong resumed trading Friday following a three-day holiday closure. The Hang Seng Index added 3.2%, led by gains in banking and technology stocks. Japan’s Nikkei 225 index rose 0.7%.
—Caitlin McCabe contributed to this article.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Dave Sebastian at dave.sebastian@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8