U.S. Treasuries fall as jobs beat fuels Fed bets

U.S. Treasuries fell and stocks struggled for direction after a better-than-expected U.S. jobs report increased bets of tighter monetary policy, eroding some bullish sentiment from Amazon.com Inc. earnings.

U.S. Treasuries fell and stocks struggled for direction after a better-than-expected U.S. jobs report increased bets of tighter monetary policy, eroding some bullish sentiment from Amazon.com Inc. earnings.

The S&P 500 shed 0.3 per cent while the Nasdaq 100 held on to a 0.3 per cent gain with Amazon jumping 12 per cent on a price hike for Prime memberships. Meanwhile, Europe’s Stoxx 600 declined as rate-hike bets reduced risk appetite. The dollar rose.

U.S. employers added more jobs than forecast last month, despite a surge in COVID-19 infections and related business closures. U.S. payrolls came in higher than all economists expected at 467,000 -- a three-month high -- while average hourly earnings also rose a higher-than-expected 0.7 per cent month over month. 

The report is likely to increase conviction in the Federal Reserve’s path forward.

“A strong jobs report, along with elevated inflationary economic data that we’ve seen recently, could boost expectations that we’ll see a 50-basis point rate increase at the March meeting,” said Brian Price, head of investment management for Commonwealth Financial Network. “I still believe that 25 basis points is the base case at this point but 50 is not off the table either.”   

It’s been a volatile week in markets as investors were jolted by weak numbers at U.S. tech giants including Facebook-owner Meta Platforms Inc., which wiped more than US$250 billion from its market value on Thursday. However, positive earnings from Amazon helped lift sentiment, with the online marketplace and tech company adding more than US$150 billion to its market cap.