Stocks Plunge as Strong Jobs Data Fuels Rate Hike Bets; Oil Set for Weekly Gain

U.S. stocks fell sharply on Friday as a blowout jobs report reinforced expectations that the Federal Reserve will continue raising interest rates to combat inflation.

Reasons for the Decline

The Labor Department reported that the U.S. economy added 339,000 jobs in May, far exceeding the 190,000 forecast by economists. Average hourly earnings rose 0.3%, indicating persistent wage pressures.

The strong data heightened bets that the Fed will need to keep tightening monetary policy, raising concerns about slower economic growth.

Sector Performance

Technology stocks led the sell-off, with the Nasdaq Composite falling 2.1%. Bank stocks also declined amid worries that higher rates could dampen borrowing and economic activity.

Oil Heads for Weekly Gain

In contrast, oil prices rose about 1.5% for the week, supported by OPEC+ production cuts and improving demand from China. Brent crude traded at $76.5 per barrel.

What It Means for Investors

The market moves suggest investors are recalibrating their expectations for Fed policy, which could lead to increased volatility in the coming weeks. Investors should monitor upcoming inflation data and the Fed's June meeting.