Stocks wobbled on Friday but headed for a losing week after a slightly weaker-than-expected June jobs report failed to subdue fears that the Federal Reserve may start hiking rates again.
The Dow Jones Industrial Average lost 31 points, while the S&P 500 dipped 0.1%. The Nasdaq Composite rose 0.2%.
The Labor Department’s June jobs report showed payrolls increase less than expected and a cooldown in growth from May. Nonfarm payrolls rose by 209,000, while the unemployment rate came in at 3.6%. Economists polled by Dow Jones had anticipated 240,000 positions added and a similar jobless level.
But parts of the report may give the Federal Reserve reason to resume hiking later this month. The closely watched wages numbers came in slightly stronger than expected. Average hourly earnings increased by 0.4% in June and 4.4% from a year ago. Meanwhile, the unemployment rate declined from 3.7% in May.
“Weaker than expected jobs data on the headline front, wasn’t supported by some other data in the report,” wrote Peter Tchir of Academy Securities in a note. It was “a mixed enough report that the Fed can probably go 25 [basis points] at the next meeting, but we don’t need to price in much more than that.”
Following the data, traders kept their bets that the Fed would resume hiking later this month. Traders are pricing in a 92% chance of a quarter-point hike on July 26, about the same odds as one day ago, according to CME Group‘s FedWatch tool. Policymakers indicated at their June gathering that two more rate hikes could be ahead in 2023.
All three major averages are headed for a losing week. The S&P 500 is off by about 0.95%, while the Nasdaq is on pace for a 0.7% decline. The Dow is the underperformer of the three, tracking for a 1.6% loss.