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• US stocks fell on Thursday after a hot ADP jobs report reinforced the Fed’s hawkish outlook.
• The report showed an increase of 235,000 jobs in December, compared to estimates of just 153,000.
• Federal Reserve members Esther George and James Bullard said on Thursday that interest rates will stay higher for longer.

US stocks fell on Thursday after a hot ADP jobs report reinforced the Federal Reserve’s hawkish view that it needs to continue with interest rate hikes in 2023 in order to cool the economy and rein in inflation. 

The report showed 235,000 jobs were added in December, well ahead of estimates for an increase of just 153,000. The Labor Department’s nonfarm payrolls report will be released Friday, and consensus estimates currently expect a gain of 210,000.

The Fed is expected to hike interest rates by 25 basis points at its upcoming February meeting, and hike rates by a total of 75 basis points in 2023. That would put the effective federal funds rate above 5%. 

Retiring Kansas City Fed President Esther George told CNBC on Thursday that she believes the Fed should hike interest rates above 5% and hold them at that level well into 2024. That runs against market expectations, which expects rate cuts by 2024.

Meanwhile, Fed President James Bullard said interest rates were approaching a sufficiently restrictive rate to tame inflation.

Here’s where US indexes stood at the 4:00 p.m. ET close on Thursday:

• S&P 500: 3,808.10, down 1.16%
• Dow Jones Industrial Average: 32,930.08, down 1.02% (339.69 points)
• Nasdaq Composite: 10,305.24, down 1.47% 

Here’s what else happened today:

• The US dollar spiked to a four-week high as traders place bets on more Fed rate hikes after the strong ADP jobs report.
• A top IMF official said the US Fed should continue with its interest rate hikes as inflation has yet to turn a corner.
• Crypto contagion spread on Thursday after Celsius customers lost control of the $4.2 billion they deposited in accounts at the bankrupt crypto lender.
• The downfall of FTX sparked a run on Silvergate Capital, which saw more than $8 billion in withdrawals. Shares of Silvergate plunged 48% on Thursday.
• The most recent minutes from the Federal Reserve showed that the central bank does not see the downfall of FTX “posing broader market risks to the financial system.”
• The SEC charged five people with allegedly scamming $45 million from of tens of thousands of investors for enticing them into a fictitious blockchain technology that they said was worth trillions of dollars.

In commodities, bonds and crypto:

• West Texas Intermediate crude oil rose 1.14% to $73.67 per barrel. Brent crude, oil’s international benchmark, jumped 1.07% to $78.67.
• Gold fell 1.08% to $1,838.90 per ounce.
• The yield on the 10-year Treasury rose two basis points to 3.71%.
• Bitcoin rose 0.08% to $16,850, while ether was flat at $1,253.