- Stocks in the US plummeted, with the S&P 500 having its worst start to a year since 2016, as investors worried that the Federal Reserve might be compelled to hike rates sooner than expected.
- Following a record close for the S&P 500 on Monday, drops in megacaps such as Tesla Inc., Nvidia, and Alphabet on Friday left the benchmark down 1.9% for the week, with the benchmark closing the first week of the new year down 1.%. The tech-heavy Nasdaq 100 finished the week down more than 4%.
- A hawkish tone in the minutes of the Fed's December meeting, released mid-week, fuelled the selloff, and a mixed employment data did little to calm fears of a rate hike as soon as March. According to data provided by a major newswire, overnight index swaps are pricing in an 88% possibility of an interest rate hike that month.
- Employers hired fewer people than expected in December, while earnings increased more than predicted and unemployment fell below 4%.
- Treasury rates have risen across the board, with the 5-year rate reaching 1.5%, returning to pre-pandemic levels. The two-year rate surpassed 0.9%, setting the stage for the largest weekly increase since October 2019. The benchmark 10-year yield surpassed the previous record of 1.80% set in 2021.
