Stock markets plunge on strong U.S. employment data; semiconductor stocks and gold prices fall sharply

5The U.S. employment data released came in stronger than expected. As a result, expectations for an interest rate hike grew. Stock markets fell sharply during the session.

Increased expectations for an interest rate hike led to higher Treasury yields. Rising Treasury yields weighed on the stock market. Downward pressure was also detected in the futures market.

The decline was particularly steep in the semiconductor sector. Semiconductor-related stocks led the weakness in the indexes. The Nasdaq and major index futures also closed lower.

Crude oil is expected to post a weekly gain. Energy prices moved higher this week. Oil prices moved sensitively in response to market risk appetite and supply signals.

Gold plunged, wiping out nearly all of its gains accumulated this year. The decline in gold prices was driven by expectations of higher interest rates and a stronger dollar. Gold contributed to a decrease in safe-haven demand.

The announcement prompted investors to reassess interest-rate risks and sector-specific sensitivities. Employment data ahead and remarks from the Federal Reserve will be important variables for the market’s direction. In the short term, volatility in interest-rate-sensitive sectors is likely to increase.