The economically sensitive Russell 2000 small-cap index was on course to plunge into a correction on Friday, falling more than 10% from its 2021 highs as investors pared back optimism on rate cuts by the Federal Reserve following a robust jobs report.
The benchmark index fell 1.9% to 2197.7 points, down more than 10% from its all-time closing high of 2442.74 points hit in November 2021.
U.S. equities sold off after data showed job growth unexpectedly accelerated in December, while the unemployment rate fell to 4.1% as the labor market ended the year on a solid footing.
The blowout report led to traders paring back their rate expectations for 2025, with most seeing the Fed waiting until at least June to reduce its policy rate, compared to chances of a cut as early as May and about a 50% chance of a second rate cut before the end of the year prior to the data.
