Wall Street Tumbles as Weak Jobs Report Raises Economic Concerns

Dow plummets after weak jobs report does spooks investors and sparks...

Wall Street's main indexes fell on Friday after a crucial jobs report did little to clear the uncertainty around the magnitude of the Federal Reserve's interest rate cut that is expected at the central bank's meeting later this month. In recent trading, the Dow Jones Industrial Average dropped 352 points, or 0.9%, to 40,409. The S&P 500 lost 1.5%, and the Nasdaq slipped 2.3%. A Labor Department report showed US employment increased less than expected in August, but a drop in the jobless rate to 4.2% suggested an orderly labor market slowdown continued. Traders' bets for a 25-basis point rate cut in September stood at 53%, according to the CME Group's FedWatch Tool. Bets for a 50-bps reduction in rates were at 47%, down from a brief rise to 51% after the data. Rate-sensitive growth stocks were mixed. Apple rose 1%, while Tesla fell 2.9% and Nvidia lost 1.5%. "The market is really struggling with this one ... it's in the middle of what could be used as a justification for either a 25- or 50-bps rate cut," Gennadiy Goldberg, head of US rates strategy at TD Securities, said. Federal Reserve Bank of New York President John Williams said a better balanced economy has opened the door to cutting rates, with the full course of action to be determined by how the economy performs. The labor market has come under scrutiny after an unexpected rise in the jobless rate sparked recession fears nearly a month ago and had sent the tech-heavy Nasdaq down more than 10% into correction territory and led to a selloff in global markets. Most of the S&P 500 sectors turned lower, led by a 1.6% drop in tech stocks. Wall Street's three main indexes were on track for a weekly loss. The benchmark S&P 500 was on course for a weekly drop of more than 2%, its steepest decline in nearly five months, led by a more than 5% fall in technology stocks. September has been historically weak for US equities, with the S&P 500 down about 1.2% for the month on average since 1928. Broadcom slid 9.3% after the chipmaker forecast fourth-quarter revenue slightly below estimates, hurt by sluggish spending in its broadband segment. Other chip stocks such as Marvell Technology dropped 3% and Advanced Micro Devices shed 1.5%, sending the Philadelphia SE Semiconductor index down nearly 2%. The semiconductor index is set for its biggest weekly drop in more than a month. Super Micro Computer dropped 4.5% after brokerage JPMorgan downgraded the AI server maker's shares to "neutral" from "overweight."

S&P 500, Dow, Nasdaq post largest weekly percentage loss in years after weak jobs data

U.S. stocks closed lower on Friday, forcing all three major indexes to register the largest weekly percentage losses in years, after a weak jobs report kept investors questioning how much the Federal Reserve would lower interest rates in coming weeks. For the week, the S&P 500 lost 4.25% and the Dow fell 2.93%. Both were their largest weekly percentage losses since March 2023. The Nasdaq declined 5.77% for the week, which was the biggest weekly percentage loss since January 2022. U.S. employers added a disappointing 142,000 jobs in August, below Bloomberg's consensus estimate of 163,000 jobs. July was revised down to 89,000, also below estimates. The unemployment rate edged down to 4.2% from July's 4.3%. Slowing jobs growth confirms that the economy is weakening, which almost ensures the Fed will cut rates when it concludes its policy meeting on September 18. However, it also may suggest the Fed's rate cuts may be too late for the economy to achieve a soft landing, said Lou Basenese, president and chief market strategist at MDB Capital in New York. "If we start seeing layoffs in the next month or two, it's going to suggest his timing was too late," he said. Bond markets looked forward to rate cuts, with the two-year Treasury yield dropping to the lowest level since 2022. How big will the Fed's rate cut be? Fed Governor Christopher Waller said on Friday "the time has come" for the U.S. central bank to begin a series of interest rate cuts, adding he is open-minded about the size and pace. The CME's Fed watch tool, which calculates the odds of a Fed move, shows a 71% chance of a quarter-point cut at the Fed's next meeting. Chances for a half-point reduction stood at 29%. In 2022 and 2023, the Fed hiked its key rate from near zero to a 23-high of 5.25% to 5.5% to fight inflation, and the rate has remained there since. Corporate news weighs on stocks, too Broadcom sank 10% to $137.00 after the chipmaker forecast fourth-quarter revenue slightly below estimates, hurt by sluggish spending in its broadband segment. Super Micro Computer lost 6.87%, dropping to $386.46 after J.P. Morgan analysts downgraded the AI server maker's shares to neutral from overweight. (Reuters contributed to this report.)

Wall Street stocks fall, big weekly drop as market waits for Fed to move

NEW YORK: U.S. stocks fell on Friday, weighed down by a jobs report that showed a continued labor market slowdown but left traders uncertain about how far the Federal Reserve will go in cutting interest rates. All three main indexes were lower, with the 11 sectors of the benchmark S&P 500 losing ground led by declines in communication services, consumer discretionary and technology equities. The S&P 500 and the Dow had their biggest weekly drop since March 2023, with the Nasdaq registering its biggest weekly drop since January 2022. U.S. Labor Department data showed U.S. employers added 142,000 jobs in August, shy of analyst expectations, while jobs growth for July was revised down to 89,000, also below estimates. The report means Federal Reserve chair Jerome Powell must cut rates later this month, but also suggests he may be too late for the economy to achieve a soft landing, said Lou Basenese, president and chief market strategist at MDB Capital in New York. "If we start seeing layoffs in the next month or two, it's going to suggest his timing was too late. Stocks are going to go down until next week when the Fed makes it definitive that they're cutting, which could put pressure on them to do 50 basis points versus 25 bps. I think 25 bps is all but guaranteed," Basenese said. Fed Governor Christopher Waller said on Friday "the time has come" for the U.S. central bank to begin a series of interest rate cuts, adding he is open-minded about the size and pace. Traders' bets for a 25-basis point rate cut in September stood at 73%, according to the CME Group's FedWatch Tool, while those for a 50-bps reduction in rates were at 27%, down from a brief rise to 51% after the report. "I still think the Fed is going to move 25 basis points," said Tony Roth, chief investment officer at Wilmington Trust in Radnor, Pennsylvania. "I don't think that the Fed is really ready at this point to push the panic button." The Dow Jones Industrial Average fell 410.34 points, or 1.01%, to 40,345.41, the S&P 500 lost 94.99 points, or 1.73%, to 5,408.42 and the Nasdaq Composite lost 436.83 points, or 2.55%, to 16,690.83. Losses in leading megacap growth stocks dragged the indexes, including the so-called Magnificent Seven: Nvidia fell 4%, Tesla slumped 8.4%, Alphabet lost 4%, Amazon shed 3.7%, Meta declined 3.2%, Microsoft dropped 1.6%, and Apple weakened 0.70%. Broadcom sank 10.4% after the chipmaker forecast fourth-quarter revenue slightly below estimates, hurt by sluggish spending in its broadband segment. Other chip stocks were down. Marvell Technology fell 5.3% and Advanced Micro Devices ended down 3.7%. The Philadelphia SE Semiconductor index finished lower by 4.5%. The semiconductor index logged its biggest weekly drop since March 2020. Super Micro Computer dropped 6.8%. J.P. Morgan analysts had downgraded AI server maker's shares to "neutral" from "overweight". Declining issues outnumbered advancers by a 3.08-to-1 ratio on the NYSE. On the Nasdaq, 1,006 stocks rose while 3,183 fell as declining issues outnumbered advancers by a 3.16-to-1 ratio. Total volume across U.S. exchanges was about 11.8 billion shares, up from a 20-day moving average of 10.7 billion shares.

The Dow plummets 400 points as disappointing jobs data fuels a tech stock selloff

The Dow Jones Industrial Average tumbled more than 400 points on Friday, extending its decline as a weaker-than-expected August jobs report added to the ongoing selloff in AI and tech stocks. The latest drop adds further pressure on market that has already had a rough start to September. The U.S. economy added just 142,000 nonfarm payrolls in August, according to data from the Bureau of Labor Statistics -- well below the 160,000 jobs economists had anticipated. Meanwhile, the unemployment rate held steady at 4.2%, aligning with consensus expectations. The mixed data came as investors are hoping that the Federal Reserve will cut interest rates this month. The Dow lost 406 points in the afternoon, or 1%, falling to 40,348. The tech-heavy Nasdaq dropped over 2.4%, while the S&P 500 shed 1.6%. Broadcom reported $13 billion in revenue for the third quarter, bringing in an adjusted $1.24 a share, narrowly beating analysts' expectations. The Palo Alto, California-based company said Thursday that it expects sales of approximately $14 billion for the fourth quarter, following below the $14.09 billion expected by analysts, according to data compiled by FactSet. Broadcom stock fell 9% to $138 per share on Friday. Major tech stocks dived as investors offloaded riskier assets, driven by growing concerns over the U.S. economy's health. Amazon and Google parent Alphabet each declined by more than 3%, while Facebook parent Meta saw a drop of over 2.5%. Tesla stock faced an even steeper decline, shedding more 6%. The broader tech sector wasn't spared either, with semiconductor stocks continuing their downward slide. Nvidia and Advanced Micro Devices both dropped 4.8%, while Super Micro Computer saw a 6.5% loss. The declines reflect heightened uncertainty in the market as investors brace for potential economic headwinds.