U.S. stocks were hammered on Friday after the crucial jobs report came in hotter than expected and jitters over Silicon Valley Bank’s ( SIVB ) stunning failure continued to weigh on markets.
Check back in on the S&P 500 (^GSPC) around ET, the index was in the red by 1.5%, while the Dow Jones Industrial Average (^DJI) fell 1.2%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) fell 1.8%.
Bond yields fell. The yield on the benchmark 10-year US Treasury bond fell to 3.71% on Friday.
Wall Street digested two major events in the financial world on Friday: the jobs report and the unfolding saga of Silicon Valley Bank, which became the largest financial institution to fail since the 2008 financial crisis.
Friday’s February job postings once again blew past expectations as the U.S. economy added 311,000 jobs, a slower pace than January’s blowout number and compared with consensus estimates from economists for job gains of 225,000. The unemployment rate rose to 3.6% and wage growth rose 4.6% year-on-year, slower than expected.
“Just go to first principles. Labor markets are undeniably strong. Over the past three months, nonfarm payrolls have averaged 351,000,” Neil Dutta, chief economist at Renaissance Macro Research, wrote in a statement.
“Full-time employment has increased by an average of 442,000 per month this year. Given the increase in the employment rate and the slowdown in wage growth (mostly a composition story), I can see why the soft bulls are running with today’s report, especially given the setup going underway, but let’s state the obvious that the Fed’s work isn’t done. Terminal rates are still rising. Oh, and it’s time to hit the mute button on people talking about the weather, impending recession, and calling the no-landing story a hoax,” he added.
Notable job gains were in leisure and hospitality, retail, government and health care, while employment lagged in information, transportation and warehousing, the Bureau of Labor Statistics reported.
The Federal Reserve has been keeping a watchful eye on all fronts in the labor market as the central bank tries to cool down inflation. February’s job postings continued to reveal the hot hiring streak, even as other recent government data points to the economy picking up steam. Economists viewed the payroll release as a report that would show whether the hiring gains were an outlier or the start of economic acceleration.
The accumulation of economic data, combined with comments this week from Chairman Jerome Powell, have fueled debate over whether a 0.25% or 0.50% Fed rate hike is likely at the March meeting.
According to the CME FedWatch tool, market participants are betting that the Federal Reserve will move a quarter-point rate hike at its next meeting.
However, recent events in the banking world have fueled other concerns for Fed officials as their monetary tightening puts stress on the banking system.
On Friday, US banking regulators took control of Silicon Valley Bank after the lender failed in its attempts to raise new capital. Treasury Secretary Janet Yellen said Friday that she is overseeing a “few banks” amid the crisis at Silicon Valley Bank.
The bank’s share price fell 68% in pre-market trading on Friday before being halted.
The sour mood has spread across markets as the KBW Bank Index ( ^BKX ) fell more than 2%, while index members including Bank of America ( BAC ) , JPMorgan Chase ( JPM ) bounced back Friday during midday trading. Shares of First Republic Bank (FRC) fell 51% and the stock was halted due to volatility. Other regional bank stocks have also been halted, including PacWest Bancorp ( PACW ), Western Alliance Bancorp ( WAL ) and Signature Bank ( SBNY ).
In other single-stock moves, Allbirds ( BIRD ) shares fell 46% after the footwear retailer posted a disappointing quarterly report that included a double-digit drop in sales and revealed a $101 million annual loss. There is also a leadership change as Chief Financial Officer Mike Bufano leaves the company.
Shares of DocuSign ( DOCU ) fell 19% after analysts at JPMorgan downgraded the stock, citing disappointing demand prospects. Despite an earnings and revenue beat, CFO Cynthia Gaylor announced she would step down this year.
Elsewhere, in the cryptocurrency market, Bitcoin (BTC-USD) crumbled below $20,000 on Friday amid the liquidation of Silvergate Capital (SI) and regulatory pressure on the industry.
—
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedInand Youtube