Wage rates spook the Dow

The Dow Jones Industrial Average fell 666 points on Friday as the market was spooked by an upsurge in wage rates.

Dow Jones Industrial Average

From the Wall St Journal:

Concerns about rising interest rates pounded financial markets Friday as investors started to take the threat of inflation more seriously, a sharp shift from the sentiment that has characterized most of the stock market’s nearly nine-year bull-market run.

Annual growth in average hourly earnings for the private sector jumped to 2.88%, close to the 3.0% expected to trigger a more hawkish stance from the Fed.

Hourly Wage Rates

The market is skittish about higher interest rates, with the VIX jumping to the highest level since November last year.

CBOE Volatility Index (VIX)

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