Wall Street ended the week in a sour note Friday on the heels of a disappointing August jobs report and a continued sell-off of technology stocks.
The tech-heavy S&P 500 was on target for its worst performance week of the year. As of 2:35 p.m. EDT, the S&P 500 was down 1.79% (98.50 points) as tech stocks Amazon and Alphabet dropped 3%.
The Dow Jones Industrial Average declined by 1.05% (428.44 points) to 40,327.31, while the Nasdaq Composite saw the largest percentage drop of 2.61% (447.33 points).
“It’s a sentiment-driven move that’s largely driven by growth concerns,” John Hancock Investment Management co-chief investment strategist said Emily Roland told CNBC. “The market’s oscillating between this idea of is bad news bad news, or is bad news good news and the sense that it may revive hopes that the Fed moves more aggressively than markets anticipate.”
The latest subpar trading day on Wall Street came after an August jobs report that delivered weaker-than-expected results. Non-farm payrolls grew by 142,000, far fewer than the 161,000 gain predicted, while the unemployment rate slipped to 4.2%.
“August payroll data indicate risks are rising as the labor market is clearly softening, and the Fed needs to step in to cut off tail risks,” said Sonu Varghese, global macro strategist at Carson Group. “The report seals the deal for a September rate cut, but the big question really is whether the Fed goes big to get in front of rising risks.”
The Federal Reserve has indicated an interest rate cut to come later this month, but the big questions is whether the central bank will decrease the benchmark rate by 25 or 50 bps.
Friday’s downward finish caps a difficult week for the major US indices. The S&P 500 is on pace for a 4% drop, its worst week of 2024, while the Nasdaq is down 5.6% and the Dow has fallen 2.8% for the week.
