DJIA: 36,231.66, down 4.81
S&P 500: 4,677.03, down 19.02
Nasdaq: 14,935.90, down 144.97

S&P 500 caps worst start to a year since 2016

U.S. stocks finished lower on Friday as investors assessed the implication of the latest jobs report on monetary policy and continued to monitor a back-up in Treasury yields. The S&P 500 dipped 0.4%, bringing its weekly decline to 1.9%— its worst start to a year since 2016. The tech-heavy Nasdaq Composite fell 1%, capping its worst five-day stretch since February 2021 (-4.5%). The Dow slipped 4 points, ending the week just 0.3% lower as more cyclical and value-oriented shares outperformed on a relative basis.

On the data front, the Labor Department showed 199,000 non-farm payrolls were added to the U.S. economy in December, missing estimates of a 450,000 increase and compares to the prior month’s upwardly revised 249,000 addition. Meanwhile, the unemployment rate fell to 3.9% from November’s 4.2% reading. Wage inflation remained elevated, climbing a larger-than-expected 0.6% in December and 4.7% year-over year. Separately, consumer credit surged to a record $40 billion in November, nearly doubling consensus estimates.

Treasuries extended the week’s rout, with the yield on the 10-year note up three basis points (0.03%) to 1.76%. The benchmark yield is perched at its highest level since January 2020, having spiked 25 basis points (0.25%) since last Friday’s (December 31) close. Shorter-dated rates also reclaimed pre-pandemic peaks as the two-year note yield experienced its sharpest weekly jump since October 2019.

Seven of 11 S&P 500 sectors closed in negative territory. Energy shares outperformed as WTI crude notched its third consecutive weekly gain. In corporate news, T-Mobile US Inc. lost 4.9% on disappointing net subscriber growth. Separately, Discovery Inc. jumped 16.9% on positive analyst commentary.

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