Please ensure Javascript is enabled for purposes of website accessibility
Stock Market Today: Another Rout Hits Wall Street, as S&P 500 Heads for Its Worst Week in 18 Months
gvw_ap_news
By Associated Press
Published 9 months ago on
September 6, 2024

Wall Street faces another rout as mixed jobs report sparks concerns about Fed's rate cut strategy and economic slowdown. (AP File)

Share

Getting your Trinity Audio player ready...

NEW YORK — Another rout is hitting Wall Street on Friday, and technology stocks are taking the brunt of it after a jobs report billed as the most important of the year came in mixed.

The S&P 500 was 1.4% lower in midday trading and heading for its worst week since March 2023. The Dow Jones Industrial Average was down 330 points, or 0.8%, as of 11:15 a.m. Eastern time, after flipping an early gain of 250 points. The Nasdaq composite dropped 2% as Broadcom, Nvidia and other tech companies led the stock market lower.

Bond Market Volatility Follows Mixed Jobs Report

The action was even wilder in the bond market, where Treasury yields tumbled, recovered and then fell again after the jobs report showed U.S. employers hired fewer workers in August than economists expected. It’s the second straight month where hiring has come in below forecasts, worsening worries after recent data showed weakness in manufacturing and some other areas of the economy.

The weaker-than-expected hiring pushed some traders to up their forecasts for how much the Federal Reserve will have to cut its main interest rate by at its meeting later this month, according to data from CME Group.

Fed’s Rate Cut Expectations and Economic Concerns

Fed Chair Jerome Powell has already indicated it’s likely to cut rates for the first time since the 2020 COVID crash. The Fed wants to protect the job market and keep the economy from sliding into a recession after earlier hiking the federal funds rate to a two-decade high to stifle inflation.

Such cuts can give a boost to investment prices, particularly if the Fed jumps beyond the traditional-sized move of a quarter of a percentage point. But the worry on Wall Street is that the Fed may be moving too little, too late and that the slowing U.S. economy could fall into a recession. That would undercut corporate profits and erase the benefits from lower rates.

“All is not well with the labor market,” said Brian Jacobsen, chief economist at Annex Wealth Management. “The Fed wanted the labor market to come into better balance, but any balancing act is unstable.”

Mixed Signals in Jobs Report

Still, the jobs report did include some more encouraging data points. For one, the unemployment rate improved to 4.2% from 4.3% a month earlier. That was better than economists expected.

And even if August’s hiring was weaker than forecast, it was still better than July’s pace, points out Scott Wren, senior global market strategist at Wells Fargo Investment Institute.

“Do not get hung up on whether” the Fed will cut by either a quarter or by an outsized half of a percentage point on Sept. 18, Wren said. “The important thing is the Fed is beginning a series of rate cuts.”

Christopher Waller, a member of the Fed’s board of governors, said in a speech after the jobs report’s release that “I believe we should be data dependent, but not overreact to any data point, including the latest data.”

“While the labor market has clearly cooled, based on the evidence I see, I do not believe the economy is in a recession or necessarily headed for one soon,” he said.

While Waller said he thinks a “series of reductions” to rates is appropriate given that a slowing job market now looks like the bigger threat for the economy than high inflation, he also said the ultimate pace and depth of those cuts is still to be determined.

Treasury Yields and Tech Stocks React

All the uncertainty sent Treasury yields on a wild ride in the bond market as traders tried to handicap the Fed’s next moves.

The two-year Treasury yield initially fell as low as 3.64% after the release of the jobs report, before quickly climbing back above 3.76%. It then dropped back to 3.63% following Waller’s comments, down from 3.74% late Thursday.

The 10-year Treasury yield, which moves more with expectations for longer-term economic growth and inflation, slipped to 3.66% from 3.73% late Thursday. It also swung between gains and losses following the jobs report.

On Wall Street, Broadcom tumbled 9% despite reporting profit and revenue for the latest quarter that were above analysts’ forecasts, thanks in large part to the boom around artificial intelligence. The chip company said it expects to make $14 billion in revenue this quarter, which was slightly below analysts’ expectations of $14.11 billion, according to FactSet.

Other chip companies also fell, including a 4.2% drop for Nvidia. After soaring earlier this year as its revenue surged due to the AI frenzy, Nvidia’s stock has been shaky since mid-July as investors question whether they took it too high. That’s even though Nvidia has continued to top analysts’ expectations for growth.

Big Tech companies have grown into the market’s most influential after their superstar runs made them even more massive, and Nvidia was Friday’s single heaviest weight on the S&P 500.

U.S. Steel rose 6.1% after the CEO of rival Cleveland Cliffs told MSNBC that his company would still be interested in acquiring U.S. Steel if the White House were to block its proposed sale to Japan’s Nippon Steel. Lourenco Goncalves also accused Nippon of frequent breaches of trade policies and cited national security issues if the proposed $14 billion Nippon-U.S. Steel were to go through.

In stock markets abroad, indexes fell across much of Europe and Asia. Trading was halted in Hong Kong because of a typhoon.

RELATED TOPICS:

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Life-Threatening Meals: Restaurants Would Identify Food Allergens for Diners Under This Proposed Law

DON'T MISS

Iran Threatens to Strike US Bases in Region if Military Conflict Arises

DON'T MISS

Trump Has Cut Science Funding to Its Lowest Level in Decades

DON'T MISS

Fresno Measure C Transportation Tax Talks Continue Amid Renewal Uncertainty

DON'T MISS

Judge Bars Trump Administration From Detaining Mahmoud Khalil

DON'T MISS

Is a Waxed Apple ‘Ultra-Processed?’ CA Bill Could Trigger a Lawsuit Barrage

DON'T MISS

Edmunds: These Five Vehicles Are Hidden Automotive Gems

DON'T MISS

GM to Invest $4 Billion to Shift Some Production From Mexico to the US

DON'T MISS

How Your Air Conditioner Can Help the Power Grid, Rather Than Overloading It

DON'T MISS

Hundreds of Laid-off CDC Employees Are Being Reinstated

UP NEXT

Iran Threatens to Strike US Bases in Region if Military Conflict Arises

UP NEXT

Trump Has Cut Science Funding to Its Lowest Level in Decades

UP NEXT

Fresno Measure C Transportation Tax Talks Continue Amid Renewal Uncertainty

UP NEXT

Judge Bars Trump Administration From Detaining Mahmoud Khalil

UP NEXT

Is a Waxed Apple ‘Ultra-Processed?’ CA Bill Could Trigger a Lawsuit Barrage

UP NEXT

Edmunds: These Five Vehicles Are Hidden Automotive Gems

UP NEXT

GM to Invest $4 Billion to Shift Some Production From Mexico to the US

UP NEXT

How Your Air Conditioner Can Help the Power Grid, Rather Than Overloading It

UP NEXT

Hundreds of Laid-off CDC Employees Are Being Reinstated

UP NEXT

National Guard Troops Have Temporarily Detained Civilians in LA Protests, Commander Says

Gavin Newsom Changes His Tune on Running for President

12 minutes ago

McConnell, Mathurin Lead Pacers’ Bench Charge in Game 3, Fueling 2-1 NBA Finals Lead Over Thunder

16 minutes ago

US Sen. Alex Padilla Was Forcibly Removed After Interrupting News Conference by Homeland Security Secretary Kristi Noem

18 minutes ago

Fresno Joins Nationwide ‘No Kings Day’ Movement at Multiple Locations

19 minutes ago

JetBlue Flight Rolls off Runway at Boston Airport, No Injuries Reported

23 minutes ago

Teoscar Hernández Hits a 3-Run Homer and the Dodgers Beat the Padres to Win the Series

36 minutes ago

Giants Rally Again to Beat Lowly Rockies for 7th Straight Win

40 minutes ago

Wildfire Burns in Madera County With No Containment

40 minutes ago

Humanitarian Workers Killed in Gaza Ambush Blamed on Hamas, Internet Cut in Territory

1 hour ago

Mexican Flags at LA Protests Are Dividing America

1 hour ago

Is the Trump-Musk Spat Really Over? Judging From Wall Street Trading, It’s a Fragile Peace

NEW YORK — The world’s most powerful politician and its richest businessman stepped back from their war of words that stunned Washingt...

5 minutes ago

5 minutes ago

Is the Trump-Musk Spat Really Over? Judging From Wall Street Trading, It’s a Fragile Peace

Tulare County Sheriff's Office detectives are investigating a shooting in Strathmore that left a man wounded late night on Wednesday, Feb. 26, 2025. (Tulare County SO)
9 minutes ago

Tulare County Inmate Found Dead in Cell, Autopsy Pending

11 minutes ago

A Look at Boeing’s Recent Troubles After Air India Crash

12 minutes ago

Gavin Newsom Changes His Tune on Running for President

16 minutes ago

McConnell, Mathurin Lead Pacers’ Bench Charge in Game 3, Fueling 2-1 NBA Finals Lead Over Thunder

18 minutes ago

US Sen. Alex Padilla Was Forcibly Removed After Interrupting News Conference by Homeland Security Secretary Kristi Noem

19 minutes ago

Fresno Joins Nationwide ‘No Kings Day’ Movement at Multiple Locations

23 minutes ago

JetBlue Flight Rolls off Runway at Boston Airport, No Injuries Reported

Help continue the work that gets you the news that matters most.

Search

Send this to a friend