Wall Street took sharp losses Friday with the Dow tumbling 665 points, as strong job gains in January caused inflation jitters.
The Dow Jones Industrial Average plummeted to 25,520, clinching its worst day since June 24, 2016, the day after the U.K.’s Brexit vote. The S&P 500 dropped 59 points to 2,762. The Nasdaq Composite fell 144 points to 7,240.
Employers added 200,000 new jobs in January, topping economists’ expectations. But the better-than-expected report caused investors to refocus on rising inflation projections, as well as the increasing odds that the Fed will increase interest rates in March.
“Make no mistake, this is a strong [jobs] report and one that shows continued growth. At the same time, there are increasing signs that we are moving toward the end of the cycle,” Brad McMillan, chief investment officer at Commonwealth Financial Network, wrote in a note to clients. “As good as this report is, it is very likely going to be as good as it gets.”
Rising yields have encouraged investors to pull their money out of equities, which are perceived as riskier assets. The yield on the benchmark 10-year U.S. Treasury note climbed above 2.83%.
Friday’s slump caps a week of negative performance for the major U.S. stock indexes. The Dow and the S&P 500 recorded their biggest weekly declines in two years, while the Nasdaq is on track for its biggest drop in more than a year.
The Dow’s largest single-day drop of 777 points came in 2008 at the height of the financial crisis.
FOXBusiness.com’s Matthew Rocco contributed to this report.