Wall Street tumbles as job growth cements rate hike bets By Reuters

By Shreyashi Sanyal and Ankika Biswas

(Reuters) – U.S. stocks plunged on Friday as solid job growth and a falling unemployment rate last month raised the odds of bigger interest rate hikes, while a warning about Revenues from Advanced Micro Devices (NASDAQ:) hit chipmakers.

The Labor Department’s closely watched jobs report showed nonfarm payrolls rose by 263,000 jobs last month after rising by 315,000 in August.

The report also showed the unemployment rate fell to 3.5% in September, below expectations of 3.7%. Traders now see a 92% chance of a 75 basis point hike from the Federal Reserve, up from 83.4% before the data.

Aggressively rising borrowing costs fueled fears of slowing economic growth and a hit to corporate profits, but with the labor market remaining tight, the U.S. central bank was likely to press ahead with its stimulus plan. monetary tightening.

“While supply and demand for labor remain in this state, combined with high inflation, the Fed will continue to be forced to tighten until the economy loses its current momentum,” said Rusty Vanneman, chief investment strategist at Orion Advisor Solutions.

Sticking to the hawkish tone of most Fed officials, New York Chairman John Williams said more rate hikes were needed to tackle persistent inflation.

The 5.14% drop was forecast for its biggest one-day percentage drop in nearly a month as an Advanced Micro Devices earnings warning signaled that the chip slump could be worse than expected. .

AMD fell 10.82% as its third-quarter revenue estimates were about $1 billion lower than earlier forecasts.

Peers Qualcomm (NASDAQ:) Inc, Intel Corporation (NASDAQ:), ON Semiconductors, Lam Research (NASDAQ:) and Nvidia (NASDAQ:) Corp lost between 2.44% and 6.63%.

“People who were hoping for some kind of token turnaround are starting to give up on that hope,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

The technology sector index fell more than 3%, leading the declines among the 11 major sector indices.

As of 11:56 a.m. ET, the was down 495.62 points, or 1.66%, at 29,431.32, the S&P 500 was down 82.39 points, or 2.20%, at 3,662, 13, and the was down 344.02 points, or 3.11%, to 10,729.30.

Wall Street’s three major indexes are set to post a three-week losing streak again, heading for their biggest weekly gain in nearly a month.

With a benchmark hitting 3.910%, most rate-sensitive tech and growth stocks such as Alphabet (NASDAQ:) Inc, Amazon.com (NASDAQ:), Apple Inc (NASDAQ:), Microsoft Corp. (NASDAQ:) fell between 2.14% and 4.46%.[US/]

FedEx Corp (NYSE:) fell 2.42% after an internal memo seen by Reuters showed the company’s division that handles most e-commerce deliveries plans to cut volume forecasts as customers plan to d ship less vacation packages.

Falling issues outnumbered advances by a 4.96-to-1 ratio on the NYSE and by a 3.79-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and 54 new lows, while the Nasdaq recorded 16 new highs and 214 new lows.