Wall St falls amid renewed rate hike fears

US stock indexes have extended losses for a second day as elevated US Treasury yields dragged growth shares after stronger than expected jobs data amplified investor fears of bigger interest rate hikes to tame surging prices.

The Labor Department's report showed non-farm payrolls increased by 428,000 jobs in April while economists polled by Reuters had expected 391,000 job additions.

The unemployment rate remained unchanged at 3.6 per cent in the month while average hourly earnings increased 0.3 per cent against a forecast of a 0.4 per cent rise.

The data underscored the economy's strong fundamentals despite a contraction in gross domestic product in the first quarter.

"No big surprises from today's jobs report - it largely confirms that the labour market remains tight, affording the Fed the flexibility to tackle its price stability mandate head-on," said Jason Pride, chief investment officer of private wealth at Glenmede.

"Wage growth came in slower and below expectations... but one month does not yet make a trend consistent enough for the Fed to slow its monetary tightening intentions."

Nine of the 11 major S&P sectors declined in early trading, with consumer discretionary sector down 1.7 per cent.

The tech-heavy Nasdaq slid 1.6 per cent, adding to a near 5.0 per cent drop in the previous session, as investors feared bigger rate hikes might be announced as inflation runs at a four-decade high.

Traders see a 75 per cent chance of a 75 basis point hike at the Fed's June meeting, despite Fed chief Jerome Powell ruling it out.

Megacap growth stocks Google-parent Alphabet Inc, Apple Inc, Microsoft Corp, Meta Platforms, Tesla Inc and Amazon.com fell between 0.1 per cent and 1.8 per cent.

The yield on the benchmark 10-year Treasury notes rose to 3.131 per cent.

Returns and valuations of interest-rate sensitive growth stocks are discounted more deeply when bond yields rise.

The Cboe volatility index, a measure of investors' anxiety, spiked 3.74 points to 34.94 as the three major averages looked to close out their fifth straight weekly decline.

In early trading, the Dow Jones Industrial Average was down 375.98 points, or 1.14 per cent, at 32,621.99, the S&P 500 was down 55.62 points, or 1.34 per cent, at 4,091.25, and the Nasdaq Composite was down 192.64 points, or 1.56 per cent, at 12,125.06.

The S&P 500 growth index was down 21.7 per cent year-to-date compared with a 6.1 per cent fall in its value counterpart, which houses economy-sensitive sectors such as energy, banks and industrials.

Under Armour Inc slumped 24.3 per cent after the sportswear maker forecast downbeat full-year profit as it grapples with higher transportation costs and a hit to its business from renewed COVID-19 curbs in China.

Shares of rival Nike Inc slipped 5.4 per cent.

Declining issues outnumbered advancers for a 5.51-to-1 ratio on the NYSE.

Declining issues outnumbered advancers for a 4.73-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 58 new lows while the Nasdaq recorded 9 new highs and 598 new lows.

Austrlaian Associated PressBack to Breaking News

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