Nasdaq tumbles 2% as traders weigh jobs report

STOCKS extended their weekly losses, with traders assessing a mixed jobs report against prospects for the Federal Reserve's monetary policy.

Technology shares led declines in the S&P 500, while the Nasdaq 100 sank 1 per cent. China's companies listed in the US tumbled amid ride-hailing giant Didi Global's preparations to withdraw from American exchanges and the Securities and Exchange Commission's plan to force foreign companies to open their books to scrutiny or risk delisting. Facebook parent Meta Platforms plunged 20 per cent from its September peak, with shares set to a enter bear market. The dollar rose.

Data showed US payrolls had the smallest gain this year in November, while the unemployment rate fell by more than forecast to 4.2 per cent. Despite mixed readings on the labor-market recovery, several economists and analysts said the report wouldn't necessarily be considered a game changer, with policy makers likely to follow through with a faster tapering of asset purchases.

Volatility across assets remains elevated, reflecting the Fed's shift toward less generous monetary settings and uncertainty about how the omicron outbreak will affect the global reopening. Fed Chair Jerome Powell told lawmakers this week that officials should consider speeding up the taper of bond buying at their December meeting to wrap it up a few months earlier than initially planned. A faster taper was backed by several other officials this week.

"Today's non-farm payroll report looks messy to me. Best to wait for the revisions next month before sounding the stagflation alarm too loudly. And, if you think this is report will push back the accelerated taper mentioned by Fed Chairman Jerome Powell this week, you would be mistaken," said Jamie Cox, managing partner for Harris Financial Group.

"Today's U.S. jobs report was never going to be blockbuster in terms of market impact. This is because Fed Chairman Jerome Powell had already set out the near-term path of monetary policy at his testimony this week," said Fawad Razaqzada, market analyst with ThinkMarkets.

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"This is a reminder of the uncertainty on the pace of the jobs recovery. It will give the Federal Reserve pause as it considers accelerating its monetary policy tightening at its December 14-15 meeting. A slower pace would be welcomed by markets," said Ben Laidler, Global Markets Strategist at multi-asset investment platform eToro.

"Markets have a lot to digest as the economy is strong, but the labor market is reaching its full potential and inflationary forces are already elevated, which is why the Fed is feeling more urgency to complete their tapering early and may need to raise interest rates more quickly than many people are expecting," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

The US Treasury again stopped short of labelling any foreign economies as manipulators of their exchange rates, while continuing to say that Taiwan and Vietnam met all three criteria for the designation. Switzerland dropped off the list, last published in April, of countries exceeding the three thresholds, with officials saying it violated two of the criteria while narrowly missing a third.

"We are in an environment where the dividend yield on the S&P 500 is below where cash yields are likely to be in a year or two," the strategist told Bloomberg TV. "Our economists are forecasting eight hikes over the next couple of years." BLOOMBERG