Wall Street: post-'NFP' rate tension weighs on tech
January 13, 2025 at 01:40 am EST
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Wall Street retreated sharply following the publication of a much stronger-than-expected NFP (30,000 more non-farm jobs than the consensus forecast, with a total of +256,000, against a backdrop of unemployment falling unexpectedly to 4.1%).
The Dow Jones and Nasdaq Composite dropped by 1.63%, the S&P500 by 1.54%, and the Russell-2000 fell by -2.22%. The VIX rallied by almost +9% to 18.7, and recorded its worst score since December 20, 2024.
After weeks of ignoring the interest-rate tension, it would appear that a milestone has been reached, with T-Bonds soaring above 4.70%. The yield on the 10-year bond rocketed +9 basis points to 4.77%... and the 30-year bond +34.5 bps to 4.96%, after testing the symbolic 5.00% mark (4.999%) intraday.
Yields fell back slightly after the release at 4.00 pm of the UMich US Household Confidence Index, which declined to 73.2 in January from 74 last month, whereas economists and analysts were expecting a more limited fall to 73.9.
While consumers' assessment of their current situation improved to 77.9 from 75.1 the previous month, the outlook component fell to 70.2, after 73.3 in December.
The University of Michigan attributes this deterioration to concerns about price trends, with inflation expectations over a 12-month horizon at +3.3% versus +2.8% last month.
The Nasdaq-100 was weighed down by falls in ON-Semiconductor (-7.5%), PayPal (-5.2%), AMD (-4.8%), Nvidia (-3%), Apple (-2.5%) and the SOXX index (-2.4%). Of note, Constellation Energy's takeover of Calpine soared +25% to a new all-time high of $305.
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