Call it a coincidence, but Punxsutawney Phil's prediction of six more weeks of winter seemingly had a chilling effect on the stock market.
What Happened in the Stock Market Today?
While Main Street celebrated a January employment report that showed better-than-expected job growth and the fastest pace of wage growth in eight years, Wall Street took the news much differently. Concerns over the potential impact of a tightening labor market on Corporate America, not to mention a couple of faceplants by large Dow components, sent the industrial average down 2.5% to 25,520 on Friday, Feb. 2. All told, the Dow has lost 4.1% over the past five sessions -- including the Groundhog Day decline of 666 points -- marking its worst single-week performance since January 2016.
The wage-growth worry on Wall Street is twofold: Fatter paychecks for employees could eventually cut into company profits, and rising wages could be signaling a coming pickup in inflation. The latter, in theory, could trigger quicker rate hikes by the Federal Reserve -- a fear that's showing up in the bond market, with the 10-year Treasury yield hitting multiyear highs above 2.8%. Also hampering the Dow were Exxon Mobil (XOM, -5.3%), which missed earnings expectations, and Apple (AAPL, -4.4%), which beat profit estimates but earned analyst downgrades because quarterly iPhone sales came up short.
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