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Wall Street slid on Friday as solid job growth and a drop in the unemployment rate last month gave more room for the Federal Reserve to stick to jumbo-sized interest rate hikes, while a revenue warning from Advanced Micro Devices hit chipmakers.
The Labor Department’s closely watched employment report showed nonfarm payrolls increased by 263,000 jobs last month after rising 315,000 in August.
The report also showed the jobless rate fell to 3.5% in September, lower than expectations of 3.7%. Traders now see a 92% chance of 75 basis-point hike by the Fed, up from 83.4% before data.
Aggressive rise in borrowing costs have stoked fears of slowing economic growth and a hit to corporate profits, but with the labor market remaining tight, the Fed was likely to continue with its monetary tightening plan.
«The markets are worried that the Fed is going to rely on information like this that’s really a month old and they’re going to overshoot and kill the economy,» said Kim Forrest, chief investment officer at Bokeh Capital Partners.
