U.S. Stock Market Plummets Amid Job Market Concerns and Fed Rate Uncertainty
U.S. stocks experienced significant declines on Friday due to a jobs report indicating a labor market slowdown. This left traders uncertain about the Federal Reserve's approach to cutting interest rates. All major indexes and sectors fell, with technology equities and megacap growth stocks taking notable hits.
On Friday, U.S. stocks plummeted, impacted by a jobs report revealing a continued labor market slowdown. This generated uncertainty among traders regarding the Federal Reserve's potential interest rate cuts. All three main stock indexes declined, led by significant drops in communication services, consumer discretionary, and technology equities.
The S&P 500 and the Dow recorded their steepest weekly declines since March 2023, while the Nasdaq experienced its largest weekly drop since January 2022. Data from the U.S. Labor Department showed that U.S. employers added only 142,000 jobs in August, falling short of analyst expectations. The jobs growth for July was also revised down to 89,000, well below predictions.
Market analysts suggest that Federal Reserve Chair Jerome Powell may need to implement rate cuts later this month. However, there is concern that his timing might be too late to ensure a soft economic landing. Prominent stocks, including Nvidia, Tesla, and Alphabet, saw substantial losses. Total volume across U.S. exchanges surged above the 20-day moving average, reflecting heightened market activity.
(With inputs from agencies.)
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