Wall Street fell sharply following a solid September jobs report, pushing the S&P 500 to a fourth straight weekly decline despite a two-day rally earlier in the week
The data cemented another jumbo-sized, 75 basis-point rate hike in November as "the labor market is still way too hot for the Fed's comfort zone," said Bill Sterling, global strategist at GW&K Investment Management.
"This was a classic case of good news is bad news," he said. "The market took the good news of the robust labor market report and turned it into an ever-more vigilant Fed and therefore potentially higher risks of a recession next year." One economist said the Fed should not be reassured by the tight labor market because when the unemployment rate begins to rise, it does so quickly and is a leading indicator of a recession.
"We haven't felt the full effects of the tightening," said Joseph LaVorgna, chief U.S. economist at SMBC Nikko Securities. "They're going to keep going until eventually this thing turns over, and when it turns over you won't be able to slow the momentum."Despite Friday's nosedive, a hefty two-day rally earlier in the week pushed the S&P 500, the Dow and the Nasdaq to post their first week of gains after three straight weeks of losses.
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