Wall Street off session highs, rate hike a done deal

Major US equity indices started the day in a positive manner amid stronger-than-expected monthly jobs report. However, they've lost their edge as the solid jobs clinched the deal for the Federal Reserve to raise interest rates next week, opening the door for a potentially more aggressive tightening path this year than initially expected. 

The pace of future rate hikes

"Investors are looking at the jobs report and they may be thinking that the Fed could be poised to move four times this year," said Robert Pavlik, chief market strategist at Boston Private Wealth. On a separate report, Goldman Sachs economists argued that they expect the Fed to raise rates in March - which would be the first for the year - and they now see the next hike in June rather than in September, as reported by Reuters.

According to the CME Group FedWatch Tool, traders are now pricing a 93% probability of a rate hike at the FOMC meeting next week, up from 85% before the data.

US crude tumbles again

Furthermore, energy shares continue to weigh on investors' sentiment. The S&P 500 energy index .SPNY fell back into the red territory after jumping up to 514.69 during the opening hours. According to the latest data released by Baker Hughes, the number of active U.S.rigs drilling for oil increased by 8, bringing the total number up tp 617 rigs this week. Following the data, WTI refreshed its lowest level since late Nov. at $48.33. At the moment the crude oil is retreating 1.64% at $48.50. 

At the time of writing, the Dow Jones Industrial Average was up 55.66 points, or 0.27%, at 20,886.36, the S&P 500 was up 5 points, or 0.21%, at 2,371.25 and the Nasdaq Composite was up 21.46 points, or 0.37%, at 5,860.27.

Headlines from the U.S. session

• US dollar index slides toward 101.00 despite NFP data
• U.S. government deficit skyrockets in February
• ECB said to have discussed whether rates can rise before QE ends - BBG
• Too early to talk about extension of OPEC deal - Novak
• US jobs report cements expectations of Fed hike next week - ING