Manashimaya
In a turbulent turn of events for the stock market, the Dow drops 459 points, Nasdaq nears correction after a disappointing jobs report, sending shockwaves through investor sentiment. The latest data from the U.S. Labour Department has raised concerns about a potential slowdown in the economy, leading to significant declines in major indices.
The Dow dropped 459 points, Nasdaq nears correction after a disappointing jobs report revealed nonfarm payrolls increased by just 114,000 in July, a sharp drop from the anticipated 175,000. This lower-than-expected job growth, coupled with a slight uptick in the unemployment rate to 4.3%, has fuelled fears of an economic downturn. The S&P 500 also took a hit, reaching its lowest point since 11th July, while the Dow faced its steepest two-day percentage decline since March 2023.
As the Nasdaq approaches a correction following a dismal employment report and the Dow falls 459 points, traders are now projecting that the Federal Reserve may carry out a more significant rate cut than initially anticipated. Rather than the more conservative 25 basis points that were first predicted, the market is now pricing in the potential of a half-percentage-point decrease in September. Freedom Capital Markets’ Chief Global Strategist Jay Woods stated, “At this point, the question isn’t if they will cut in September, but rather how much. Recession chatter and criticism of the Fed will intensify as a result of the official activation of the Sahm rule, a recession gauge.”
Amidst the market turmoil, tech giants like Amazon and Intel reported downbeat forecasts, further dampening investor confidence. Amazon’s stock plummeted by 11.7% after the company reported a slowdown in online sales growth for the second quarter, with cautious consumers opting for cheaper purchase options. Intel faced an even steeper decline, tumbling 26.7% after forecasting lower-than-expected third-quarter revenue and announcing a suspension of its dividend starting in the fourth quarter.
The Dow drops 459 points, Nasdaq nears correction after a disappointing jobs report also saw other chip stocks extending their losses. Nvidia fell by 4.4%, Broadcom lost 3.3%, Micron Technology shed 5.7%, and Arm Holdings dropped by 6.3%. The Philadelphia SE Semiconductor Index hit a three-month low, falling 4.5%, reflecting broader concerns about the tech sector’s performance.
Meanwhile, Apple managed to buck the trend, inching up by 2.3% after reporting better-than-expected third-quarter iPhone sales and forecasting future gains, bolstered by their focus on AI innovation. However, this was not enough to offset the overall losses in the tech sector, as the Dow drops 459 points, Nasdaq nears correction after a disappointing jobs report.
The broader market also faced significant challenges, with eight of the eleven S&P 500 sub-indexes falling. The Consumer Discretionary sector led the losses, poised for its biggest one-day drop since September 2022. Other major tech stocks, including Microsoft, Alphabet, and Meta, also saw declines, underlining persistent concerns about the overvaluation of the “Magnificent Seven” group of stocks.
As the Dow drops 459 points, Nasdaq nears correction after a disappointing jobs report, Wall Street’s “fear gauge” breached its long-term average, reaching its highest level since October. The Russell 2000 small-cap index also took a hit, dropping 3.3% to a three-week low and marking its largest two-day percentage drop since June 2022.
In conclusion, the Dow fell 459 points, and the Nasdaq is about to correct itself following dismal jobs data, highlighting how precarious the state of the economy is right now. The market is experiencing uncertainty due to shaky job data and negative business expectations. A recession is becoming more likely, therefore investors will be keenly observing the Federal Reserve’s next move.
