Stock Market Tumbles: S&P 500 and Nasdaq Face Significant Weekly Losses Amid Strong Jobs Data and Semiconductor Slump

Stocks Tumble On Jobs Data, Nasdaq 100 Eyes Worst Week In 2 Years As Semiconductors Slump: What's Driving Markets Friday? - Broadcom (NASDAQ:AVGO)

Semiconductor stocks drag the market lower, with Nvidia dropping 4%, extending weekly losses to 14%, its worst decline since October. Investors showed little enthusiasm for the August jobs report, as the slower-than-expected hiring numbers deepened worries about a softening labor market. The U.S. economy added 142,000 nonfarm jobs in August, up from July's 89,000 but falling short of the projected 160,000. The unemployment rate edged down by 0.1% to 4.3%, in line with expectations, while wages saw stronger-than-anticipated growth, rising 0.4% month-over-month. On Friday, markets shifted sharply into risk-off mode, with all major indices dropping over 1% by midday trading in New York. The CBOE Volatility Index (VIX) spiked over 17% to 23 points. The Nasdaq 100 led the decline, losing over 5% for the week, eyeing its worst performance since September 2022. Semiconductors dragged down the tech-heavy index. The iShares Semiconductor ETF SOXX dropped nearly 5%, while Nvidia Corp. NVDA fell more than 4%. The chipmaker giant extended the weekly loss to 14%, on track for its steepest decline since October 2022. Investors dumped equities and moved into cash as the U.S. dollar strengthened despite weaker-than-expected nonfarm payroll data. In the bond market, short-term Treasury yields tumbled, bringing the yield curve back to a normal shape after two years of inversion. The two-year Treasury yield fell below the 10-year, signaling a shift in economic outlook. Commodities took heavy losses across the board. Gold dropped 0.9%, silver plunged 3.1% and crude oil (WTI) slid 3%, reaching $66 per barrel, the lowest since May 2023. Bitcoin BTC/USD also dropped, losing over 3%, as investors steered clear of crypto assets amid a broad-based decline in risk appetite. Friday's Performance In Major US Indices, ETFs According to Benzinga Pro data: The SPDR S&P 500 ETF Trust SPY was 1.8% lower to $539.77. The SPDR Dow Jones Industrial Average DIA fell 1.1% to $404.13. The tech-heavy Invesco QQQ Trust Series QQQ tumbled 2.7% to $448.38. The iShares Russell 2000 ETF IWM fell 2.2% to $207.31. The Consumer Staples Select Sector SPDR Fund XLP outperformed, flat for the day, while the Technology Select Sector SPDR Fund XLK lagged, down 3%. Friday's Stock Movers Broadcom Inc. AVGO tumbled 9.9%, on track for its worst session since March 2020, following weaker-than-expected guidance. Other stocks reacting to earnings included Samsara Inc. IOT, up 13%, Guidewire Software Inc. GWRE, up 11.8% and DocuSign Inc. DOCU, up 3.9%. Super Micro Computer Inc. SMCI plummeted over 7% as JPMorgan downgraded the rating from Buy to Neutral and sharply lowered its price target from $950 to $500. Read Next: AI Tech Sector 'Is Not In A Bubble,' But Diversification Out Of Magnificent 7 Is Key, Goldman Sachs Says Photo created using artificial intelligence via Dall-E. Market News and Data brought to you by Benzinga APIs

S&P 500 Suffers Largest Weekly Drop Since March 2023 Banking Crisis, Chipmakers Notch Worst Week In Over Four Years - Amazon.com (NASDAQ:AMZN), ASML Holding (NASDAQ:ASML)

Semiconductors saw heavy selling, with SOXX declining 11.8%, the worst week since March 2020. The S&P 500 index endured its sharpest weekly decline in over a year and a half -- a drop that hasn't been seen since the banking crisis in March 2023. A cooler labor market report prompted investors to reduce their risk exposure after three consecutive weeks of gains. On Friday, Wall Street experienced a strong "risk-off" session, with the S&P 500, tracked by the SPDR S&P 500 ETF Trust SPY, closing 1.7% lower. This extended the weekly loss to 4.1%. Tech stocks were hit even harder. The Invesco QQQ Trust, Series 1 QQQ, which follows the performance of major tech stocks, plunged 2.6% on Friday. This resulted in a 5.8% weekly loss, the steepest since October 2022. Semiconductors bore the brunt of the selling. The iShares Semiconductor ETF SOXX, a barometer for the semiconductor industry, sank 4.3% on Friday alone. Over the week, the sector was down 11.8%, its worst weekly performance since March 2020. Cooling Employment Numbers Amplify Risk-Off Mood Friday's selloff was driven in large part by the latest labor market data. The U.S. economy added just 142,000 nonfarm payrolls in August, missing the forecast of 160,000 and significantly below the one-year average of 202,000 new jobs per month. The unemployment rate ticked down slightly from 4.3% to 4.2%, in line with expectations, while wage growth provided a mild upside surprise. "We acknowledge that today's employment report was weaker than we expected, but we don't see a recession," said veteran Wall Street investor Ed Yardeni. Yardeni highlighted that while employers are not laying off workers en masse, their demand for new hires has slowed down, even as the supply of labor has increased. "The moderation in the labor market has been characterized by low layoffs and slowing hiring," added Bank of America economist Shruti Mishra. In response to the softer jobs data, Bank of America altered its forecast for Federal Reserve rate cuts. Previously, the bank had expected 25 basis point cuts per quarter beginning in September. Now, the firm foresees the Fed trimming rates by 25 basis points at each meeting for the next five sessions, bringing the policy rate down to 4% by March 2025. Friday's Major Drags On The S&P 500 Here's a breakdown of the five largest contributors to Friday's decline in the S&P 500: Friday's Worst-Performing Semiconductor Stocks The semiconductor sector faced particular challenges, with major names among the worst performers: Now Read: AI Tech Sector 'Is Not In A Bubble,' But Diversification Out Of Magnificent 7 Is Key, Goldman Sachs Says Image: Shutterstock Market News and Data brought to you by Benzinga APIs