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A pedestrian is reflected in an electronic stock board outside a securities firm in Tokyo, Japan, on Friday, June 9, 2017. The Topix index closed higher after swinging between gains and losses, and the yen weakened, as the market continued to digest former FBI chief James Comey's Senate testimony, the European Central Bank rate decisiin and U.K. election results. Photographer: Noriko Hayashi/Bloomberg

(bloomberg)

(Bloomberg) -- U.S. stocks capped the worst week in a month, as the selloff in Treasuries that took yields to seven-year highs persisted amid speculation the latest jobs report clears the path for raising interest rates.

Technology shares led losses Friday, sending the Nasdaq 100 Index to a weekly drop of 3 percent amid concern the U.S.-China trade spat will intensify. Eight of 11 sectors declined in the S&P 500. Intel Corp. dropped the most in the Dow Jones Industrial Average after Bloomberg’s report on Chinese hacking. Stocks began the day higher after the employment data added to confidence in the strength of the American economy.

Stocks Blown Away by Bonds: Bloomberg reporters talk the week in markets.

Just a week after U.S. stocks plowed to fresh records, investors continued to sell the bull market’s biggest winners, ditching high-flyers from Amazon.com to Netflix. The tech rout is the latest blow for global stocks in a week that saw 10-year U.S. Treasury yields climb to seven-year highs, reducing demand for riskier assets. Fed Chairman Jerome Powell stoked the rates surge when he said the central bank could eventually boost its benchmark past the neutral level.

“It’s more trade worries than anything else because these companies, they either sell a lot to China or produce a lot in China,” said Matt Maley, equity strategist at Miller Tabak + Co. “And we have the issue of the two naval boats in China, which raises it to more than just an economic issue -- there’s political tensions there. And then of course there’s the hacking issue.”

The 10-year bond yield pushed above 3.21 percent as the unemployment rate fell to a 48-year low, though the number of jobs created fell short of estimates. The dollar turned lower versus major peers. Gold futures rose, crude gained and the pound advanced.

“The jobs report was nothing great -- it was ok. Today we’re all over the place,” Donald Selkin, chief market strategist at Newbridge Securities, said. “It will be volatile, it will chop around in both directions. We’ll settle into a lower range until earnings start coming out towards the end of the month.”

Treasuries resumed a slide as investors speculated the low unemployment rate and major upward revision to prior months would do little to deter the Fed from raising rates for a fourth time this year. The hiring figures were influenced by the hurricane that hit the Southeast last month, muddling the picture.

“This is a report that’s consistent with being pretty close to full employment and it’s going to reinforce the Fed’s path for raising rates,” Alan Krueger, professor of economics at Princeton University, said on Bloomberg TV.

Earlier, a rout in technology shares roiled Asian equity markets. PC maker Lenovo Group Ltd. plunged 15 percent in Hong Kong, amid Bloomberg’s report that China infiltrated U.S. companies by hacking hardware. In Europe, miners led the Stoxx 600 lower as industrial-metal prices fell and Danske Bank A/S headed for a four-year low. Germany’s 30-year bond was poised for its biggest one-week yield increase since April. Italian bonds also slipped as GDP forecasts failed to convince investors the country will be able to meet fiscal targets.

Elsewhere, West Texas Intermediate crude oil prices climbed back toward $75 a barrel. Copper led a decline in industrial-metal prices as a rally in raw materials stalled. Gold advanced, capping the best week in six for the precious metal.

Terminal users can read our Markets Live blog.

These are the main moves in markets:

Stocks

  • The S&P 500 fell 0.6 percent at 4 p.m. in New York. It’s down 0.9 percent in the week.
  • The Nasdaq 100 Index dropped 1.2 percent, and was off 3 percent for the worst week since March.
  • The Stoxx Europe 600 Index fell 0.9 percent to the lowest in three weeks.
  • The MSCI All-Country World Index declined 0.6 percent.
  • The MSCI Emerging Market Index dipped 1 percent to the lowest since May 2017.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2 percent.
  • The euro declined less than 0.1 percent to $1.1524.
  • The British pound climbed 0.7 percent to $1.3113.
  • The Japanese yen increased 0.2 percent to 113.753 per dollar.

Bonds

  • The yield on 10-year Treasuries advanced four basis points to 3.2271 percent, the highest in more than seven years.
  • The two-year yield rose two basis points to 2.89 percent.
  • Germany’s 10-year yield climbed four basis points to 0.57 percent, the highest in more than 19 weeks.
  • Italy’s 10-year yield jumped 10 basis points to 3.42 percent.

Commodities

  • West Texas Intermediate crude was flat at 74.34 a barrel.
  • Gold futures increased 0.5 percent to $1,207.60 an ounce.
  • Copper fell 0.3 percent to $2.78 a pound, the lowest in more than two weeks.

--With assistance from Jeremy Herron, Sarah Ponczek, Robert Brand and Luke Kawa.

To contact the reporters on this story: Jeremy Herron in New York at jherron8@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net;Christopher Anstey at canstey@bloomberg.net

©2018 Bloomberg L.P.

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