Stock market news today: Nasdaq falls 10% from record high after disappointing jobs report
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Published 2024-08-02
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US stocks tumbled across the board on Friday after the July jobs report showed more cooling in the labor market, fueling concerns the Federal Reserve's "higher for longer" interest-rate stance might end in recession.
The Nasdaq Composite (^IXIC) dropped 2.9% after the jobs report's release. That plunged the tech-heavy index into correction territory, more than 10% below its recent high in early July.
The Dow Jones Industrial Average (^DJI) slumped nearly 2.4%, or close to 1000 points, as a flight from stocks accelerated. The S&P 500 (^GSPC) sank 2.5%.
Stocks kicked off August with a sell-off after a clutch of data on Thursday showed cracks emerging in the US economy, wiping out gains spurred by expectations for a September interest-rate cut.
Wall Street has been wondering whether the economic slowdown shown in recent data means the Federal Reserve has kept interest rates at historic highs for too long, risking a recession.
The US economy added fewer jobs than expected in July, while the unemployment rate unexpectedly rose to 4.3%, the Bureau of Labor Statistics' nonfarm payrolls report for July showed. Those additional signs of a slowdown in the labor market are likely to feed recession fears and rate-cut expectations.
Traders are pricing in three rate cuts this year — in September, November, and December — and bets are on a 50 basis-point reduction in September. The yield on the benchmark 10-year Treasury (^TNX) dived further below the 4% level after the labor-market update, trading around 3.84%.
The news for individual stocks was just as downbeat as the economic data, too, with chipmaker Intel's (INTC) bombshell earnings adding to the pressure on stocks amid questions about the payoff of AI investments for Big Tech.
The chipmaker said it will slash jobs and suspend dividends after its sales forecast fell short and it missed on earnings. Intel shares sank over 25% in early trading, dragging on other chip stocks.
Meanwhile, Amazon stock slid almost 10% on the heels of sales guidance that undershot Wall Street estimates. Apple (AAPL) shares were a relative winner, up 1% after the company beat on earnings even as it reported a slide in iPhone sales.
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