By Gunjan Banerji 

Markets ended a tumultuous week on an ominous note, with a broad technology-sector selloff sending major U.S. stock indexes sharply lower and Treasury yields falling at a pace not seen since some of the worst days of the pandemic last year.

After a relatively placid stretch across financial markets, investors have been confronted with several fresh worries that have triggered volatility in markets around the globe.

Many investors expect the Fed to raise interest rates next year after a prolonged period of keeping them near zero, a policy that has propelled the market to record after record over the past year. Federal Reserve Chairman Jerome Powell said this week that the central bank was prepared to pare its easy-money policies at a quicker pace, opening the door to raising interest rates in the first half of 2022.

Some investors said that the prospect of rate increases comes at a precarious time. New monthly jobs figures, released Friday, highlighted how sluggish job growth has been even though the unemployment rate dwindled in November to the lowest level since February 2020, stoking a wild session of trading.

And the new Omicron variant has emerged, injecting further volatility into the stock market as investors were already weighing rising inflation and the path of the economic recovery. The variant has triggered fresh restrictions around the world, throwing up new obstacles to the economy just as travel was starting to bounce back after last year's Covid-19 measures. Scientists are trying to gauge how effective current vaccines will be against the variant.

Omicron will absolutely affect growth in the next few months

-said Dev Kantesaria, founder of Valley Forge Capital.

The Nasdaq ended the week with a 2.6% weekly loss, lagging behind its peers, and concluded its biggest two-week percentage decline since March. The S&P 500 fell 1.2%. The Dow Jones Industrial Average fell 0.9%, notching a fourth consecutive week of losses.

Traders and analysts said they expected continued volatility as people around the world learned more about the variant.

Though losses in the stock market have been broad-based, many highflying tech and growth stocks have badly underperformed after a November in which traders  poured gobs of money into hot tech stocks and their options bets.

Shares of $Meta Platforms(FB.US)$, formerly Facebook, and $Netflix(NFLX.US)$ tumbled 7.9% and around 9.5%, respectively, this week. The $ARK Innovation ETF(ARKK.US)$, which recently counted $Tesla(TSLA.US)$, $Coinbase(COIN.US)$ and $Zoom Video Communications(ZM.US)$ among its biggest holdings, has fallen 13% for the week. $NVIDIA(NVDA.US)$ and $Advanced Micro Devices(AMD.US)$, which outperformed in November as traders piled into their shares and options, lost 2.6% and around 7%, respectively, this week.

The moves in tech stocks highlight how quickly investments that were widely favored by individual and institutional investors alike have retreated, in some cases dragging the broader market lower as they unraveled.

Many investors rushed to the Treasury market as stocks fell on Friday, sending the yield on the 10-year Treasury note below 1.4%. Some investors have grown concerned that the end of Federal Reserve stimulus could mark the beginning of an economic slowdown next year.

Friday's moves continue a turbulent week for Wall Street, marked by big swings up and down. Before Friday, the S&P 500 had logged moves of at least 1% up or down for five consecutive sessions, the longest such streak since October 2020.

The $S&P 500 index(.SPX.US)$ lost 38.67 points, or 0.8%, to 4538.43, on Friday. The index rallied Thursday despite uncertainty about the Omicron variant's potential impact on the global economy. The tech-focused $Nasdaq Composite Index(.IXIC.US)$ lost 295.85 points, or 1.9%, to 15085.47, rallying to start the day before falling as much as 2.9%. The $Dow Jones Industrial Average(.DJI.US)$ fell 59.71 points, or 0.2%, to 34580.08.

Friday's monthly jobs report showed how slower hiring threatens to cloud the economic recovery, though some analysts said they found some good news in the data. The report showed that employers added 210,000 jobs in November, below the 573,000 expected by economists polled by The Wall Street Journal. The unemployment rate declined to 4.2% last month and the share of people either working or looking for work rose, a positive sign for the economy.

On balance I would still rate it a good report for the economy, despite the fact that the headline looks to be a miss

-said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

Mr. Zaccarelli said that he thought the report would give the Fed greater confidence that the economy is doing well.

Still, the moves in the bond market have puzzled some investors who have questioned why yields are slipping even as the Federal Reserve is expected to raise interest rates next year and inflation has remained high. Jason Pride, chief investment officer of private wealth at Glenmede, said that it indicated some fixed income investors were positioning for the Fed to make a policy mistake, or for the central bank to not move ahead with the pace of rate increases many are anticipating.

"Fixed-income markets are moving in the opposite direction of what everyone's monetary policy expectations are. There's a little bit of a hint here of the market being scared of a Fed mistake."

-said Mr. Pride

In bond markets, the yield on the benchmark 10-year Treasury note fell to 1.342% this week, recording the biggest one-week yield decline since June 2020. Yields have now fallen for three consecutive weeks. Yields and prices move inversely.

Brent crude futures, the benchmark in global oil markets, lost 2.4% this week to $69.88, notching a sixth consecutive week of declines. OPEC and a group of Russia-led oil producers agreed Thursday to continue pumping more crude, betting that pent-up demand in a post-lockdown world would outweigh any hit to economic activity from the recent Covid-19 permutations. The group said its session would remain open, a technical move that would allow it to reconvene quickly and change course if the Covid-19 situation changes dramatically.

In corporate news, $Zillow-C(Z.US)$'s stock jumped more than 11% after the real estate technology company authorized a share buyback. $DocuSign(DOCU.US)$ shares plunged more than 42% after the e-signature software company posted earnings that suggested weakening demand, and guidance for the current quarter that fell shy of Wall Street's expectations. DocuSign's drop weighed on the ARK Innovation ETF.

Overseas, the pan-continental Stoxx Europe 600 fell 0.6%, also giving up earlier gains.