12:03 PM EST, 01/10/2025 (MT Newswires) -- US equity indexes dropped in midday trading Friday as a beat on nonfarm payrolls and rising inflation expectations ignited a mover higher in government bond yields.

The S&P 500 dropped 1.6% to 5,826.1, with the Nasdaq Composite down 1.9% to 19,117.2 and the Dow Jones Industrial Average 1.6% lower at 41,972.3. All sectors were in the red intraday, with technology and consumer discretionary leading the decliners.

The December employment report showed nonfarm payrolls rose by 256,000, above the 165,000 jobs increase expected in a survey compiled by Bloomberg, the US Bureau of Labor Statistics reported. November payrolls saw a downward revision to a 212,000 increase, while October payrolls were revised upwards to a 43,000 gain, for a net downward revision of 8,000 jobs.

The unemployment rate fell to 4.1% in December from 4.2% in November, compared with a 4.2% rate expected.

Hourly earnings rose by 0.3%, as expected, and followed a 0.4% increase in November. Hourly earnings were up 3.9% year-over-year, slower than a 4% pace in November.

The US Treasury yields rose intraday, with the 10-year up six basis points to 4.74% and the two-year 11.1 basis points higher at 4.37%.

In other economic news, the University of Michigan's preliminary consumer sentiment index slipped to 73.2 in January from 74.0 in December, compared with expectations for no change in a survey compiled by Bloomberg. Respondents saw one-year inflation expectations at 3.3%, up sharply from 2.8% in December and the highest since May 2024, while five-year inflation expectations accelerated to 3.3% from 3%.

In company news, Walgreens Boots Alliance ( WBA ) shares surged 25% intraday, the top performer on the S&P 500, after the company reported fiscal Q1 results that topped analyst expectations, with a year-over-year increase in revenue.

Constellation Energy ( CEG ) agreed to acquire privately-held energy company Calpine in a cash-and-stock deal for a net price of $26.6 billion, including debt. Its shares soared almost 25% intraday, among top gainers on the S&P 500 and the Nasdaq.

West Texas Intermediate crude oil futures soared 3.5% to $76.52 a barrel.