The S&P 500 index falls to 4520

Tips

• US equities were on track to register their third consecutive day of losses as investors increased their bets on Fed tightening.

• The S&P 500 was down 0.2 percent at the time of writing at the 4520 range.

US markets were on track to post their third consecutive negative day on Friday, as solid US labor market data and an inflationary ISM Manufacturing PMI report heightened the probability of the Fed tightening at a faster pace this year and next. The S&P 500 was last trading in the 4520s, down approximately 0.1 percent on the day, having bounced between lows just above 4500 and highs near 4550. The index is on track to close the week with minor losses of approximately 0.4 percent and a decline of approximately 2.4 percent from Tuesday's highs.

The Nasdaq 100 index, which is strongly weighted toward technology and growth stocks, was a slight underperformer, shedding roughly 0.5 percent to fall back into the 14,700s, leaving the index more than 3.0 percent behind prior weekly highs in the 15,200s. However, the index is still on track to end the week in the green. On Friday, technology/growth names declined due to a big increase in US rates, particularly at the short end, following excellent US data, which increases the "opportunity cost" of owning stocks with low current earnings in comparison to their valuation.

Stocks with significantly greater current earnings in comparison to current values, or so-called value/cyclical stocks, which account for a larger portion of the Dow, did well on Friday. Indeed, the Dow was trading flat in the 34,600s, just over 2.0 percent below its weekly highs in the 35,300s. The S&P 500 CBOE Volatility Index (or VIX), frequently referred to as Wall Street's "fear gauge," decreased around a half-point to close to its long-term average of around 20.00. This leaves it only about 1.50 above previous lows, indicating that the present equity market is experiencing calmer waters.