By Yasin Ebrahim

Investing.com – The S&P 500 struggled for direction Friday, paced by a semiconductor-led slide in tech amid surging Treasury yields as a mixed monthly job report failed to cool expectations for a sooner-rather-than-later Federal Reserve rate hike.

It fell 0.14 percent, while it gained 0.277% or 103 point, and the Nasdaq suffered 0.7%.

In December the U.S. created 199,000 new jobs, which was significantly below expectations of an increase of 400,000. With the participation rate unchanged at 3.9%, the unemployment rate declined to 3.9%. It is a sign of a tight labor marketplace.

Wage growth rose 0.6% in the last month. This is an indication that inflation pressures will persist, prompting the Fed to tighten its monetary policy sooner than anticipated. It was higher than economists expected for 0.4%.

“Today’s data affirms the Federal Reserve’s conclusion that the labor market has recovered despite the shortfall in jobs since February 2020,” said Diane Swonk, chief economist at Grant Thornton.

Tendencies for Fed tightening more aggressively pushed yields higher. In fact, the yield on the 10-year note briefly rose to 1.8%. This supported bids in cyclical market sectors like financials.

Expect the yields to rise in future to help financials, including bank stocks.

“I would be looking at 2% or even 2.25% on the 10-year yield as an upside target,” Chief Market Strategist David Keller at StockCharts told Investing.com in an interview on Friday.

“[V]We are very few people who have experienced an investment environment in which banks outperformed tech stock. That hasn’t happened for many years. [but] that’s more the environment we’re going to be in,” Keller added.

Even though oil prices were at a low point, energy stocks performed well. Investors continued to support the sector in anticipation of next week’s quarterly earnings season.

“We could come out of this first earnings season, seeing sectors like financials and energy looking fairly attractive and a lot of clouds on the horizon for growth sectors,”  according to Keller.

Tech dropped 0.5% because of mixed performances in big tech, and weakness semiconductor stocks.

Texas Instruments, Lam Research (NASDAQ) and ON Semiconductor (NASDAQ) fell more than 33%

Discovery (NASDAQ:) was one of the bright spots on the day, rising more than 16% after Bank of America upgraded the stock to buy from neutral, citing the company’s pending merger with Warner Media.

GameStop’s (NYSE:) gain more than 4 percent on news that it is creating a platform for NFTs.