Wall Street faced a perfect storm of market-moving events on Friday, as a blowout jobs report, surging oil prices, and a strong U.S. dollar sent stocks tumbling and investors scrambling. The S&P 500 Index dropped nearly 2% to hover around the 5,800-point level, fully erasing gains made since the election. The Dow Jones Industrial Average traded 336 points lower, or 0.8%, while the Nasdaq Composite lost 1%.


The U.S. economy added 256,000 jobs in December, far exceeding expectations of a slowdown to 160,000. The unemployment rate dipped to 4.1%, defying forecasts that had anticipated it to remain at 4.2%. This red-hot labor market data spurred traders to recalibrate their interest-rate projections, with markets now fully pricing in a reduction only by September 2025. According to the CME FedWatch Tool, expectations for a rate cut have been postponed even further, with markets now fully pricing in a reduction only by September 2025.



Oil prices surged more than 3% to $76 per barrel after the Biden administration imposed stricter sanctions on Russian oil exports. These measures targeted major Russian oil companies, shadow fleet tankers, and opaque trading networks, intensifying pressure on Moscow’s energy revenues. Rising interest rate concerns and inflation uncertainty weighed heavily on equities, with the S&P 500 dropping nearly 2% to hover around the 5,800-point level, fully erasing gains made since the election.

The U.S. Dollar Index (DXY) climbed to 109.70, marking its highest level since November 2022, and is on track to notch its sixth consecutive weekly gain. The greenback is on track to rise in 14 of the past 15 weeks, underscoring its dominance as a safe haven amid market turbulence. Treasury yields climbed further as fixed-income investors braced for the possibility of persistent inflation. The 10-year Treasury yield rose seven basis points to 4.76%, nearing its late October 2023 highs. The 30-year Treasury yield briefly touched the 5% mark, a level last seen in October 2023 and previously in August 2007.



Gold prices offered a haven for risk-averse investors, climbing 0.9% as geopolitical uncertainties mounted. Meanwhile, Bitcoin BTC/USD saw some dip-buying activity, up by 1.2%, snapping a three-day losing streak during which it shed 10% of its value. Friday’s Performance In Major U.S. Indices, ETFs Major IndicesPrice1-day % chgS&P 5005,812.53-1.8%Dow Jones41,837.77-1.9%Nasdaq 10020,744.86-2.1%Russell 20002,173.84-2.9%Updated at 12:30 p.m. ET According to Benzinga Pro data: The SPDR S&P 500 ETF Trust SPY flattened at $588.43. The SPDR Dow Jones Industrial Average DIA was unchanged at $425.08. The tech-heavy Invesco QQQ Trust Series QQQ eased 0.1% to $514.72. The iShares Russell 2000 ETF IWM dipped 1% to $220.91. The Health Care Select Sector SPDR Fund XLV outperformed, up 0.4%; the Communication Services Select Sector SPDR Fund XLC lagged, down 0.9%.

In conclusion, the strong jobs report, surging oil prices, and a strong U.S. dollar sent stocks tumbling and investors scrambling on Friday. The S&P 500 Index dropped nearly 2% to hover around the 5,800-point level, fully erasing gains made since the election. Oil prices surged to $76 per barrel, while the U.S. Dollar Index (DXY) climbed to 109.70, marking its highest level since November 2022. Treasury yields climbed further, with the 10-year Treasury yield rising to 4.76% and the 30-year Treasury yield briefly touching the 5% mark. Gold prices offered a haven for risk-averse investors, climbing 0.9%, while Bitcoin BTC/USD saw some dip-buying activity, up by 1.2%. The market's focus on interest rate concerns, inflation uncertainty, and geopolitical tensions highlights the interconnectedness of global markets and the importance of monitoring currency exchange rates in addition to other economic indicators.