By Lewis Krauskopf, Bansari Mayur Kamdar and Johann M Cherian

(Reuters) – The S&P 500 ended slightly lower on Friday, a day after a sharp sell-off, as investors digested a U.S. jobs report that showed weaker-than-expected growth and awaited more economic data and corporate earnings in the weeks ahead.

The U.S. added the fewest jobs in 2-1/2 years in June, although persistently strong wage growth pointed to still-tight labor market conditions, U.S. government data showed.

The data showing nonfarm payrolls increased by 209,000 jobs last month followed Thursday’s report that June private payrolls surged, which sparked a sell-off on fears the Federal Reserve would move aggressively to hike interest rates to tame inflation.

“The jobs report today I think is consistent with what the Fed would like to see,” said Josh Jamner, investment strategy analyst at ClearBridge Investments.

“That’s not to say, mission accomplished or the job is done. But continued cooling in the jobs market ultimately will make their lives easier.”

According to preliminary data, the S&P 500 lost 12.42 points, or 0.28%, to end at 4,399.17 points, while the Nasdaq Composite lost 18.33 points, or 0.13%, to 13,660.72. The Dow Jones Industrial Average fell 196.21 points, or 0.58%, to 33,726.05.

Energy and materials were among the biggest-gaining S&P 500 sectors, while defensive groups including consumer staples lagged.

The Fed is still widely expected to raise rates at its meeting later this month after pausing in June, as job growth remains above the pace in the decade before the pandemic.

Chicago Fed President Austan Goolsbee said he does not disagree with his fellow U.S. central bankers that rates will need to rise a couple more times this year to beat back too-high inflation.

Friday’s jobs report kicks off a busy month of data including reports on inflation and corporate earnings ahead of the Fed meeting at the end of July.

“The next couple of weeks … will just be a lot of data for people to digest, so this volatility especially coming off of the strong first half that we had is probably what we are going to see for the next few weeks,” said Carol Schleif, chief investment officer with the BMO Family Office.

In company news, Levi Strauss & Co shares tumbled after the denim clothing maker cut its annual profit forecast.

Shares of Rivian Automotive surged after the electric vehicle maker reported better-than-expected quarterly deliveries.

U.S.-listed shares of Alibaba gained after Chinese authorities said they will impose a $984 million fine on Ant Group, ending the affiliate fintech company’s years-long regulatory overhaul.

(Reporting by Lewis Krauskopf in New York, Bansari Mayur Kamdar and Johann M Cherian in Bengaluru; Additional reporting by Caroline Valetkevitch; Editing by Shinjini Ganguli and Richard Chang)

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