On Friday, benchmark equity indexes in the United States faced a downturn, while Treasury yields surged as traders evaluated official economic data indicating that job growth in December surpassed expectations. The Dow Jones Industrial Average experienced a notable decline of 1.6%, closing at 19,161.6.
Similarly, the Nasdaq Composite and the S&P 500 both dropped by 1.6% and 1.5%, respectively, finishing at 41,938.5 and 5,827. Real estate and financial sectors were hit particularly hard, marking the biggest declines, while the energy sector stood out as the only area showing growth. In an unusual turn, US stock markets were closed on Thursday in remembrance of former President Jimmy Carter's passing, which may have contributed to the heavy trading on Friday.
Over the week, the Nasdaq saw a decline of 2.3%, while both the Dow and the S&P 500 lost 1.9%. From a macroeconomic perspective, the Bureau of Labor Statistics reported an increase of 256,000 in total nonfarm payrolls last month, which significantly outpaced the consensus forecast of 165,000, as per a survey conducted by Bloomberg. BMO Capital Markets noted, "This was a robust employment report that reinforces the resilience of the US labor market and expansion and will keep the Federal Reserve on hold in January as they try to bring inflation pressures down." The prevailing market sentiment anticipates that the Federal Open Market Committee of the central bank will maintain interest rates at their current levels later this month, according to insights from the CME FedWatch tool. In terms of consumer sentiment, preliminary results from the University of Michigan's Surveys of Consumers indicated a decline in US consumer confidence, with inflation expectations for the upcoming year reaching their highest levels since May.
Specifically, consumers' five-year inflation outlook rose to 3.3% from 3%, marking the third instance in the last four years where this metric exhibited such a significant one-month shift. In the realm of Treasury yields, the US two-year yield escalated by 12.1 basis points to 4.38%, while the ten-year rate climbed by 8 basis points to 4.76%. Turning to company-specific news, Constellation Brands ($STZ) suffered a considerable drop of 17%, marking the most significant decline on the S&P 500.
This came on the heels of the beer and wine producer's announcement to lower its annual sales outlook after its fiscal Q3 results failed to meet Wall Street estimates. In the media space, Walt Disney's ($DIS) ESPN, alongside partners Fox ($FOXA) and Warner Bros. Discovery ($WBD), announced the cancellation of their anticipated Venu Sports streaming service.
This decision sent Warner Bros. shares down by 3.6%, while Disney and Fox saw drops of 1% and 1.6%, respectively. Constellation Energy ($CEG) made headlines with its agreement to purchase the closely held power producer Calpine for a staggering $26.6 billion in cash, stock, and assumed debt. Following this announcement, shares of Constellation Energy surged by 25%, reflecting the largest gain on the Nasdaq and the second-highest on the S&P. In dramatic market movements, Walgreens Boots Alliance ($WBA) enjoyed a robust gain of 28%, leading the S&P after the drugstore chain reported better-than-expected fiscal Q1 results, attributed to growth in sales across various divisions.
The company has maintained its full-year earnings outlook despite the challenging retail landscape in the US. In commodity markets, West Texas Intermediate crude oil experienced a notable increase of 3.7%, rising to $76.63 a barrel. This movement came as the US Department of the Treasury imposed further sanctions on Russia, revealing stringent measures aimed at crippling its oil production and exports.
These factors are anticipated to elevate demand from Middle Eastern producers, particularly those led by Saudi Arabia, according to insights from Saxo Bank. Gold prices rose by 1.1%, hitting $2,719.70 per troy ounce, while silver saw an increase of 1%, with prices settling at $31.32 per ounce..