Stocks fall as hiring pickup dims hopes for a rate cut

Stocks fell broadly and bond yields rose on Wall Street in midday trading Friday after the government reported a strong pickup in hiring last month, complicating the Federal Reserve’s decision later this month on whether to lower interest rates.

The Labor Department said that employers added a robust 224,000 jobs in June. The pickup in hiring could give the central bank pause later this month when its policymakers are scheduled to meet and consider cutting the Fed’s benchmark interest rate.

Most investors have anticipated a Fed rate cut this month and perhaps one or two additional cuts later in the year after the central bank signaled in June that it was prepared to lower interest rates to keep the economy growing in the face of slowing global growth and the fallout from U.S. trade conflicts.

“What the markets are really trying to figure out now, relative to the Fed, is on a stronger (jobs) report the question becomes, will they cut rates?” said Darrell Cronk, chief investment officer for Wells Fargo Wealth and Investment Management. “When you get this kind of holiday shortened weeks and light trading volume any kind of movement tends to be over accentuated.”

The S&P 500 was down 0.6% as of 11:41 a.m. Eastern time. The Dow Jones Industrial Average dropped 131 points, or 0.5%, to 26,834. The techheavy Nasdaq composite slid 0.6%.

Major stock indexes in Europe also fell.

Traders were betting Friday that a rate cut in late July may be less likely now.