Stocks are swinging between small gains and losses in morning trading on Wall Street Friday as the market struggles with what to make of a surprisingly strong report on the US jobs market.

The S&P 500 was 16.74 points or 0.43% down at 3,885.88 as of 10:19 a.m. Eastern time. On the positive side, employers hired as many more workers in June than expected despite concerns about a possible recession.

Also Read | Shinzo Abe death: Was ex-Japan PM Tetsuya Yamagami’s target?

However, the hotter the economy remains, the more likely it is that the Federal Reserve will continue to hike key interest rates sharply aggressively in its bid to curb inflation. Indicating the fears regarding rising rates, Treasury yields jumped immediately after the release of the jobs data. The two-year Treasury yield, which often moves with expectations for Fed action, jumped as high as 3.15% from 3.00%. But it moderated as the session progressed and its easing back to 3.06% coincided with a recovery of stocks.

Also Read | How to survive a market crash

The Nasdaq composite was 62.32 points or 0.54% down at 11,559.02. The technology and other high-growth firms that make up a big chunk of that index have been some of the most vulnerable to increasing rates recently.

The Dow Jones Industrial Average was down 78.37 points, or 0.25%, at 31,306.28.

Also Read | US inflation rate at a 40-year high | A timeline: 1930-2022

The Federal Reserve has already increased its key short-term interest rate three times this year, and the hikes have become increasingly aggressive. Last month it hiked rates by the sharpest degree since 1994, by 0.75% to a range of 1.50% to 1.75%. It was at virtually zero as recently as March.

Also Read | Great Depression to COVID: Top 5 market crashes in American history

The Fed move has led to the slowdown of some parts of the economy. The housing market has cooled in particular as mortgage rates rise in concert with Fed actions. Other sectors of the economy have also shown signs of flagging and confidence has declined among consumers as they contend with the highest inflation in four decades.

Also Read | Who is Ramesh ‘Sunny’ Balwani?

Wall Street remained optimistic that the recently mixed data on the economy could convince the Federal Reserve to easier its stance on rate hikes. This week’s reprieve from soaring prices for oil and other commodities helped strengthen such expectations but Friday’s jobs report may have undercut them.

In stock markets abroad, stocks were mixed or modestly higher.

Also Read | What are the Digital Market and Digital Services Acts?

Tokyo’s key stock market index slipped following the assassination of former Japanese prime minister, Shinzo Abe but traded in the green for the day. Abe, 67, died after being shot during a campaign speech Friday in western Japan.

The Nikkei 225 added 0.1% after being up by more than 1% before the attack. On Wall Street, GameStop shares fell 3.7% after the retailer abruptly ousted its chief financial officer.