Jan 11, (V7N) - U.S. stock markets faced a notable decline, with the S&P 500 wiping out its gains for the year after a positive jobs report raised concerns about inflation. This development has sparked worries that the Federal Reserve might adopt a more cautious stance regarding interest rate cuts in the upcoming year.The Dow Jones Industrial Average dropped by 696.75 points (1.63%), closing at 41,938.45. The S&P 500 fell 91.21 points (1.54%) to 5,827.04, while the Nasdaq Composite decreased by 317.25 points (1.63%) to 19,161.63.
 
The Russell 2000 index also saw a decline of 2.27%, entering correction territory with a 10.4% drop from its high on November 25. Additionally, the Volatility Index (VIX) reached a three-week peak.According to the Labor Department, job growth in December was unexpectedly strong, with the unemployment rate decreasing to 4.1%. This robust labor market data has raised fears of inflation, potentially prompting the Federal Reserve to reassess its interest rate policies. Market participants expect that the Fed may begin to lower borrowing costs in June but will remain cautious throughout the year. Some financial institutions have even adjusted their forecasts to indicate a possible rate hike.
 
The University of Michigan's survey revealed a decline in consumer sentiment to 73.2 in January, contributing to a negative outlook for the market. Concerns about inflation have intensified, particularly with President-elect Donald Trump's imminent inauguration, leading to speculation about potential shifts in trade and immigration policies. Investors are closely monitoring the upcoming consumer price index report on January 15, as any unexpected inflation data could trigger further market volatility.Walgreens Boots Alliance saw a significant stock increase of 27.55% after reporting strong quarterly profits. In contrast, Constellation Brands experienced a decline of 17.09% after revising its annual sales and profit forecasts downward. Constellation Energy's stock surged by 25.16% following its acquisition of Calpine Corp for $16.4 billion. Meanwhile, chip stocks, including Nvidia, fell approximately 3% due to anticipated new U.S. export regulations.
 
Overall, the number of declining stocks outpaced advancing stocks, with a ratio of 4.24-to-1 on the NYSE and 3.32-to-1 on the Nasdaq. The S&P 500 recorded six new 52-week highs and 32 new lows, while the Nasdaq noted 39 new highs and 211 new lows. Trading volume on U.S. exchanges reached 16.24 billion shares, exceeding the average of 12.31 billion shares over the previous 20 trading days.
End/BUS/RH/