By Yasin Ebrahim

Investing.com – The S&P 500 dropped Friday, as a better-than-expected monthly jobs report fueled investor bets on more aggressive Federal Reserve rate hikes ahead, stoking fears of slowing economic growth.  

It fell 1.3%. The slipped 1.2% or 406 point, and the fell 1.9%.

In April there was an increase of 428,000 jobs above the consensus expectation for 391,000, and the unemployment rate stood at 3.6%.

Although the monthly slowdown in wages was 0.3%, economists still expect wage growth amid tight labor markets.  

“We still expect the unemployment rate to drop to 3% by year-end, and wage inflation to accelerate toward 6%, which in turn will put a floor under inflation around 3.5-4%,” Jefferies said in a note.

Inflation is expected to trend above the Fed’s 2% target for some time, exacerbating investor worries about the impact on the consumer, which makes up about two thirds of economic growth.

“Fed Chairman Powell was hopeful that he could derail inflation without a “significant” increase in unemployment,” Diane Swonk, chief economist at Grant Thornton, said in a note. “Hope is not the same as reality.”

As investors continue to place bets on Fed tightening, tech stocks continue to suffer from pressure, having suffered a tumble a day before.

Google’s parent Alphabet (NASDAQ) and Microsoft (NASDAQ), as well Amazon (NASDAQ), Meta (NASDAQ), fell more than 1%. Apple (NASDAQ) was the exception to the trend and traded above the flatline.

Materials, which were led by Vulcan Materials (NYSE):, was also a major drag in the overall market. Corteva (NYSE:), and Ball Corporation (NYSE :), with the former falling more than 7 percent after Wall Street’s negative comments.

“We are downgraded BLL [Ball Corporation] to sector perform rating from an outperform given inflationary cost pressures in EMEA, the suspension of its Russian operations and weakness in Brazil,” RBC said as it cut its price target on the stock to $81 from $100.

Wearing Under Armour (NYSE:) plunged 23% in the meantime after reporting a surprise loss. The guidance was also lower than expected as supply-chain woes continue to hinder growth.

DraftKings (NASDAQ) dropped more than 8 percent after paring gains, even though the sports betting firm reported quarterly results which beat both top and bottom line.

As supply worries persist, oil prices rose and energy stocks fell, oil prices also dropped. The European Union amended its Russian embargo plans to give Hungary, Slovakia and Czech Republic additional time to enforce the ban. The EU is expected to reach a decision on its Russian oil embargo plan this weekend. 

Peloton Interactive (NASDAQ:) lost 6% in other news following Wall Street Journal reports that Peloton Interactive, a connected fitness equipment manufacturer, is trying to sell between 15% and 20% of its shares to increase its capital.