Traders work on the floor of the New York Stock Exchange in New York City on January 2, 2025.
Spencer Platt | Getty Images
Stock prices fell on Friday. This happened after two new reports about the U.S. economy were released. These reports made it less likely that the Federal Reserve will lower interest rates soon.
The Dow Jones Industrial Average dropped by 627 points, which is a 1.4% decrease. The S&P 500 also fell by 1.4%, and the Nasdaq Composite lost almost 2%.
The U.S. added 256,000 jobs in December. Economists thought there would be only 155,000 new jobs. The unemployment rate dropped to 4.1%. This made the 10-year Treasury note yield reach its highest level since late 2023.
People think there is a 97% chance the Fed will keep interest rates the same in January. After the job data, the chance of a rate cut in March fell to about 25%.
The University of Michigan’s consumer sentiment index also showed worries about inflation. Their index was 73.2, lower than expected.
Vocabulary List:
- Economy /ɪˈkɒnəmi/ (noun): The system of production distribution and consumption of goods and services in a particular area.
- Consumer /kənˈsjuːmə/ (noun): A person who purchases goods and services for personal use.
- Inflation /ɪnˈfleɪʃən/ (noun): The rate at which the general level of prices for goods and services is rising.
- Unemployment /ˌʌnɪmˈplɔɪmənt/ (noun): The state of being without a job despite being willing to work.
- Yield /jiːld/ (verb): To produce or provide especially in terms of income or return on an investment.
- Sentiment /ˈsɛntɪmənt/ (noun): A view or opinion that is held or expressed.
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