Investors are on edge as the S&P 500 faces potential volatility following the latest nonfarm payrolls report, with rising bond yields adding to market unease. The options market is anticipating a significant move, reflecting the largest implied shift on a jobs day since September. This heightened volatility expectation is driven by persistent job growth and high inflation, which may prompt the Federal Reserve to delay interest rate cuts. The looming threat of rising bond yields further complicates the trading environment, as they traditionally pressure stock prices by increasing discount rates and reducing the present value of future earnings.
The iShares Core S&P 500 ETF (IVV) experienced a slight decline, dropping 0.25% to $590.12 at 10:40 AM on Wednesday, January 8.