Wall Street closed sharply lower on Friday after a day of broad-based stock market slide. Jobs data released on the day stoked fear that the central bank might opt for an even slower pace of rate cuts. All of the three most widely followed indexes closed the session firmly in the red.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 1.6%, or 696.75 points, to close at 41,938.45. Twenty six components of the 30-stock index ended in negative territory, while four ended in positive.

The tech-heavy Nasdaq Composite lost 317.25 points, or 1.6%, to close at 19,161.63.

The S&P 500 declined 91.21 points, or 1.5%, to close at 5,827.04. Ten of the 11 broad sectors of the benchmark index closed in the red. The Real Estate Select Sector SPDR (XLRE), the Financials Select Sector SPDR (XLF) and Technology Select Sector SPDR (XLK) declined 2.4%, 2.4% and 2.2%, respectively, while the Energy Select Sector SPDR (XLU) gained 0.4%.

The fear-gauge CBOE Volatility Index (VIX) increased 8.1% to 19.54. A total of 16.2 billion shares were traded on Friday, higher than the last 20-session average of 12.3 billion. Decliners outnumbered advancers by a 4.24-to-1 ratio on the NYSE, while on the Nasdaq Composite, declining issues had a 3.32-to-1 advantage.

Markets Dip Sharply on Nonfarm Jobs Report

Job growth in the United States witnessed unexpected acceleration in December and the unemployment rate fell to 4.1%, per the Nonfarm Payrolls report from the Labor Department. The labor market ended the year strong, with nonfarm payrolls increasing 256,000 for December against a consensus of 155,000. The number for November was revised down to 212,000 from the previously reported 227,000.

While creation of new jobs have slowed down in 2024, layoffs have been historically low. Labor market has remained resilient beyond expectations, and this has reinforced views that the Fed would keep reduce rates slower than promised earlier. This led to an overall slide in the markets, with all broad sectors other than energy feeling the heat.

Consequently, shares of Molson Coors Beverage Company TAP and CBRE Group, Inc. CBRE fell 5.7% and 4.7%, respectively. CBRE currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Weekly Roundup

The three most widely followed indexes closed their second straight losing week last Friday. The Dow Jones Industrial Average, the S&P 500 and the tech-focused Nasdaq Composite declined 1.9%, 1.9% and 2.3%, respectively. Throughout the week, trade remained muted in apprehension of strong labor market data which eventually came out on Friday and stoked fear that the Fed would react hawkishly. However, earlier in the week, the tech sector was boosted by expected tariff measures from the incoming Trump administration.

Economic Data

Per the Labor Department, the average workweek for December remained unchanged at 34.3.

Average hourly earnings for December came down to 0.3% compared to the 0.4% reported in November.

Per the University of Michigan’s preliminary report, consumer sentiment for January 2025 has come in at 73.2, decreasing from the 74 reported in December.

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