Stocks falling as hot jobs data suggests Fed hikes not over

NEW YORK (AP) — Stocks are swinging lower through a roller-coaster Friday following a blockbuster report on the U.S. jobs market that offered both good and bad news for Wall Street.

The S&P 500 was back down 0.5% in afternoon trading after briefly recovering from early losses. Other stock indexes were similarly shaky as U.S. employers unexpectedly accelerated their hiring last month and added hundreds of thousands more jobs than forecast.

The blistering data suggests the economy may not be in a recession, as feared. But it also undercuts investors' speculation that a slowing economy may mean a peak for inflation soon. That means the Federal Reserve may not let up on its aggressive rate hikes to combat inflation as early as hoped. And much of Wall Street still revolves around expectations for rates.

“It's a reminder for investors on how uncertain Fed policy is going forward and the strong jobs market data shows just how far the Fed has to go,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

Stocks of technology and other high-growth companies once again took the brunt of the losses amid the rising-rate worries, and the Nasdaq composite fell 0.8%, as of 2:18 p.m. Eastern time.

The good news on the jobs market helped to limit losses for the Dow Jones Industrial Average, whose stocks tend to move more with expectations for the overall economy. It was down 0.1%, or 21 points, at 32,705.

Beyond the nation’s strong hiring, wage growth for workers also unexpectedly accelerated last month. That's helpful for households trying to keep up with the fastest price gains in 40 years. But it also raises worries on Wall Street that inflation will become more embedded in the economy.

Higher wages can cause companies to raise prices for their own...