S&P 500 Index, NASDAQ Composite Attempting to Recover from Knee-jerk Reaction to Hot Labor Market Report

As traders attempt to recover earlier losses, the tech-heavy NASDAQ Composite and the benchmark S&P 500 Index are down late in trading on Friday but still much above their intraday lows.

As investors changed their bets in anticipation of a more hawkish-than-expected Federal Reserve response to a positive U.S. job market report, U.S. stocks declined and U.S. Treasury yields increased.

The November Non-Farm Payrolls report, which showed employers increasing wages amid worries of a recession and hiring more people than anticipated in November, is the driving force behind the price movement.

The blue-chip Dow Jones Industrial Average is currently trading at 34294.50, down 100.51 or -0.29%, at 19:00 GMT. The NASDAQ Composite Index is trading at 11394.84, down 87.61 or -0.76%, and the S&P 500 Index is at 4054.08, down 22.49 or -0.55%.

Jobs Hotter Than Expected Report

In contrast to economists' predictions of 200,000 jobs, the U.S. Labor Department reported that nonfarm payrolls expanded by 263,000 jobs last month. Additionally, average hourly wages rose by 0.6% from 0.5% in October. Traders have a 0.3% increase factored in. The Unemployment Rate, the report's lone positive point, remained constant at 3.7% even though the Fed would have preferred an increase.

According to the data, employers appear unconcerned about rising interest rates. They must first believe they need the people, and they must also be sure they can turn a profit even in an environment with rising interest rates.

Leading the Job Gains Were the Leisure and Hospitality Sectors

According to the report's internal statistics, the industry that added the most jobs, 88,000, was leisure and hospitality. Since consumers are traveling and dining out after being quarantined due to the pandemic, this is not really surprising.

Surprisingly, the building sector generated 20,000 jobs as well, despite the housing sector suffering from four straight rate rises of 0.75 percentage points.