Dow Jones Hits Record High, Surpassing 38,000 Points

Stock Market Today: Stocks crushed as markets see Fed rate error

Check back for updates throughout the trading day U.S. equity futures extended their heavy declines in early Friday trading as investors retreated from stocks in major markets all over the world amid a shift in risk sentiment from inflation concerns to worries over a near-term recession. Stocks ended sharply lower last night following a muted reading for manufacturing activity in the world's biggest economy, which fell to an 8-month low in July, and concern that the Federal Reserve's reluctance to lower interest rates may have harmed growth prospects and raised recession risks. "Investors had difficulty digesting the manufacturing data - is this a one-off, or is this the slow roll toward the recession that never happened?", asked Jamie Cox, managing partner for Harris Group Financial in Richmond, Va.. "Markets are now thinking maybe the Federal Reserve should have cut this week," he added. Related: The Fed's biggest problem isn't inflation anymore Deteriorating employment data was also added to the mix, with softer-than-expected tallies for weekly jobless claims and and closely-tracked report on corporate layoffs showing the weakest hiring intentions since 2012. Treasury bond yields, which have normally been supportive for stocks, plunged sharply lower as a result, but with the moves based on flight-to-safely rather than rate cut projections, markets reacted negatively. Benchmark 10-year notes yields, which fell below the 4% level for the first time since February last night, were last marked at January levels of 3.942% in early New York trading. At the same time, 2-year note yields, which are the most sensitive to projections in interest rate changes, fell to 4.115%, the lowest since May of last year, as bets on a larger 50 basis point Fed rate cut in September jumped to 29.5%, according to the CME Group's FedWatch. Markets will be keenly focused on today's July employment report, which is expected to show another slowdown in hiring and muted wage growth. Original estimates were for a headline increase of 177,000 new jobs, but weaker data earlier this has widened the forecast to between 140,000 and 180,000 heading into the release at 8:30 am Eastern time. On Wall Street, stocks are looking at a sharply lower open following last night's selloff, with futures contracts tied to the S&P 500 indicating at 69 point decline at the start of trading. The Dow Jones Industrial Average, meanwhile, is called 425 points lower with the tech-focused Nasdaq priced for a 350 point pullback. Apple (AAPL) shares were a notable premarket mover, rising 0.4% after the iPhone maker posted better-than-expected third quarter earnings and said sales and margins would likely improve over the coming months. Related: Apple earnings top forecasts, iPhone sales slip ahead of AI launch Amazon (AMZN) was marked 8.5% lower after it posted a mixed set of second quarter earnings that included a modest miss on the revenue side that was accentuated by the group's plans to ramp up capital spending on AI projects over the second half of the year. Intel (INTC) shares, meanwhile, collapsed more than 20% in premarket, taking the stock back to levels since the mid-1990s, after the chipmaker issued a muted near-term sales forecast, unveiled plans for a 15% reduction in headcount and suspended its quarter dividend. More Wall Street Analysts: In overseas markets, Europe's regional Stoxx 600 benchmark fell 1.67% in Frankfurt, with Britain's FTSE 100 down 0.52% in London. Overnight in Asia, Japan's Nikkei 225 fell 5.08% for its biggest single-day decline since the pandemic, with the broader Topix index, which includes domestic-focused stocks, suffering the worst day since 2016. The region-wide MSCI ex-Japan benchmark fell 2.44% into the close of trading. Related: Veteran fund manager sees world of pain coming for stocks

Dow Jones Today: Stock Futures Sharply Lower Amid Tech Selloff as July Jobs Report Looms

Stephen Wisnefski is the Executive Editor of News at Investopedia. He has more than two decades of experience as a journalist and newsroom leader, including 25 years at Dow Jones and The Wall Street Journal. Stock futures tied to major indexes were sharply lower Friday as tech stocks reeled following weak earnings reports and investors awaited the July jobs report, amid concerns that the U.S. economy is slowing more than previously thought. Futures tied to the Dow Jones Industrial Average were down 0.8%, while those tied to the S&P 500 and Nasdaq 100 were off 1.2% and 1.8%, respectively. The major indexes tumbled Thursday amid a selloff in chip stocks, while fears mounted about an economy suffering under the weight of high interest rates. Dow component Intel (INTC) was leading the decliners in premarket trading Friday, losing more than 20% of its value, after the chipmaker late Thursday announced a wider-than-expected quarterly loss and said it would lay off 15% of its staff as part of a massive cost-cutting effort. Other chip stocks, including AI investor favorite Nvidia (NVDA) were also down sharply. Amazon (AMZN) was also down about 8% before the bell after the e-commerce giant reported weaker-than-anticipated quarterly revenue and issued soft guidance for the current quarter. Fellow Magnificent Seven member Apple (AAPL) was flat after an earnings beat. Investors are anxiously awaiting the 8:30 a.m. ET release of the monthly U.S. employment report from the Bureau of Labor Statistics. Economic reports released Thursday showed that manufacturing activity was lower than expected, construction spending fell and more people filed unemployment claims, raising the prospect that the Federal Reserve's policy of high interest rates is seriously slowing the economy. The Fed has kept its influential lending rate at its highest level since 2001 in an effort to tame inflation. Earlier this week, after the central bank decided to leave interest rates unchanged, Chair Jerome Powell acknowledged progress on inflation and said the Fed could be in a position to cut interest rates as soon as September. The yield on 10-year Treasurys, which is sensitive to expectations around interest rate cuts, was at 3.94% Friday morning, after dropping below 4% for the first time in six months yesterday. Gold prices hit another record high on Friday and were at just over $2,500 an ounce, while crude oil was down slightly.