US stocks extend losses as investors digest jobs report and Fed moves

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  • US stocks dropped Friday, extending losses from a rout in the previous session. 
  • The US economy added 428,000 jobs in April, more than the 391,000 median expectation. 
  • The strong report suggested the Fed will stick to its path of interest rate hikes. 

US stocks ended in the red Friday, extending a rout after a strong US monthly jobs report indicated the Federal Reserve will stay on course with steady hikes in interest rates. 

Stocks stretched losses into a second session, following Thursday’s rout that sent the Dow Jones Industrial Average plummeting more than 1,000 points, wiping out Wednesday’s rally. 

Equities fell further Friday after the Labor Department said the economy added 428,000 jobs last month, a number that was higher than the median estimate of 391,000 jobs. 

“Job gains in April were broad-based and with another good labor report, the Federal Open Market Committee can emphasize the imbalances to price stability over supporting labor markets,” said Jeffrey Roach, chief economist at LPL Financial in a note. “The accelerating pace of inflation is an obvious concern for committee members and a tightening labor market adds fuel to the fire.”

Here’s where US indexes stood at 4:00 p.m. on Friday:    

Around the markets, Galaxy Digital CEO Mike Novogratz said the Nasdaq sell-off isn’t over and the economy is headed for “painful stagflation”.

Bond yields continued to rise Friday as prices fell, with investors pricing in expectations for further rate hikes. The 10-year yield rose six basis points to 3.12%. 

Around the markets, China is unlikely to hit its 5.5% target for growth this year, says economist Stephen Roach

Legendary investor Jeremy Grantham has issued a warning about the US housing market as mortgage rates rise. 

Oil prices rose. West Texas Intermediate crude gained 1.9% to $110.36 per barrel. Brent crude, the international benchmark, gained 1.2% to $112.86.

Gold edged up 0.3% to $1,881.50 per ounce. Bitcoin fell 1.2% to $36,033.84.