By Yasin Ebrahim

Investing.com – The S&P 500 fell Friday, after data showed job gains fell well short of estimates in November at time when concerns about the impact of Omicron on economic growth continue to dominate investor sentiment.  

They fell 1.5% and slipped to 0.76% (or 261 points), respectively. The dropped 2.5%.

“It was a colossal miss,” Darren Schuringa, CEO of ASYMmetric ETFs said in an interview with Investing.com, referring to weaker-than-expected job gains in November. “When I look at these numbers now, it is concerning for me from an economic strength standpoint.”

Nonfarm payrolls increased 210,000 in November, well below economists’ expectations for 550,000 new jobs.

However, deeper analysis of the monthly jobs report revealed signs that the labor market is strong. While the unemployment rate was lower than expected at 4.2%, it rose to 61.8% due to an increase in labor force participation of 0.2%.  

While the weakness in hiring “could complicate the discussion at the Federal Reserve … [Fed] officials seem to be leaning toward faster monetary policy normalization in response to high inflation,” Desjardins said in a note.

Microsoft was leading the tech stocks selloff.

Microsoft  (NASDAQ:) fell nearly 3%, while Apple (NASDAQ:), Amazon (NASDAQ:), Facebook (NASDAQ:), and Google-parent Alphabet (NASDAQ:) were down 2%.

The selling of chips stocks was also exacerbated by Nvidia’s (NASDAQ:) drop above 5% following the Federal Trade Commission’s lawsuit to stop its $40 billion acquisition of chipmaker ARM Holdings. (LON:) This action was based on concerns about competition.

“[W]e see the FTC’s decision to sue to block the deal as almost certainly ending the chances of any acquisition,” Wedbush said in a note.

DocuSign plunged 40% in the meantime after it released softer guidance for its fourth-quarter. Its weaker guidance suggests that DocuSign is not likely to continue its pandemic-fueled growth.

In other news, Peloton Interactive  (NASDAQ:) gave up earlier gains and followed the market lower despite Deustche Bank issuing a buy rating on the stock amid expectations that a hybrid approach to fitness – at home and at the gym – is a possibility.

“[W]I believe the hybrid model of work extends to health and fitness. [Peloton] has plenty of momentum to regain operationally,” Deutsche Bank said in a note.

Financials saw a sharp decline in bank lending, as Treasury yields plummeted and the 10-year yield fell below 1.4%.

SVB Financial, First Republic (NYSE;), Citizens Financial (NYSE 🙂 were some of the most severely affected regional banks due to falling yields that tend to limit net interest income from banks.

As the Fed looks ready to increase monetary policy tightening, investors are concerned about the future outlook of the economy at a time that the Fed’s new omicron variation could pose a threat to growth.

The market might resume trending higher if it turns out that the new version is less important than anticipated and if supply chain woes do not continue to ease. 

“If there are no borders, the supply chain can continue to be open.” [problems] continue to unravel, then that would support the markets moving higher from here,” Schuringa said.