The S&P 500 tumbled on Friday, marking its worst week since 2023. Investors reacted to a weak August jobs report and sold off leading technology stocks. The broad index slid 1.73% to settle at 5,408.42.
Stocks To Watch | 📊 Ready, set, trade! Keep an eye on these stocks as they set the market abuzz#StockMarket pic.twitter.com/xilm7LcfBe
— ET NOW (@ETNOWlive) September 13, 2024
The Nasdaq dropped 2.55% to close at 16,690.83, marking its worst weekly performance since 2022. The Dow Jones Industrial Average fell 410.34 points, or 1.01%, to end at 40,345.41.
‘Investors are snapping up shares in US consumer staples stocks such as Coca-Cola and Colgate-Palmolive as they hunt for more defensive areas of the market amid concerns over a potential slowdown in the US economy.’ https://t.co/NqjCDldQxj pic.twitter.com/x5PR1xUh78
— Jesse Felder (@jessefelder) September 13, 2024
Emily Roland, co-chief investment strategist at John Hancock Investment Management, said, “It’s a sentiment-driven move largely fueled by growth concerns.
CAUTION 🚨: Stocks are now entering the worst 2-week period of the year pic.twitter.com/NXax95sU2m
— Barchart (@Barchart) September 14, 2024
The market is oscillating between the ideas of ‘is bad news bad news,’ or ‘is bad news good news,’ potentially reviving hopes that the Federal Reserve might move more aggressively than markets anticipate.
Which is it?
Stocks usually do quite well for the month when the first day is down 2% (like this month).
But the second half of September is usually pretty weak. pic.twitter.com/BHJDCNswVL
— Ryan Detrick, CMT (@RyanDetrick) September 13, 2024
Megacap tech stocks suffered significant losses as investors ditched risk assets amid increasing worries about the health of the U.S. economy. Apple slid 3.7%, and Microsoft slumped 4%. Amazon also lost more than 3%, and Nvidia shed 10%.
Other semiconductor names, including AMD, dropped about 4%. The S&P 500 closed out a rocky week with a 4.3% decline, its worst since March 2023. The Nasdaq shed 5.8% for its worst week since 2022, while the 30-stock Dow slumped 2.9%.
Fresh August jobs data further fueled concerns about a slowing labor market.
S&P 500 tumbles amid market worries
Nonfarm payrolls grew by 130,000, falling short of the 161,000 gain expected by economists polled by Dow Jones.
However, the unemployment rate increased to 4.2%, in line with expectations. Charles Ashley, portfolio manager at Catalyst Capital Advisors, said, “The market, in general, is looking for direction, and that’s going to come from the Federal Reserve.” Investors expect the Fed to cut rates by at least a quarter-percentage point after its policy meeting later this month. Softening labor market trends have increased bets that the central bank may cut rates more aggressively.
In other market news, U.S. crude oil prices hit their lowest level since June 2023, posting their worst week in nearly a year. The benchmark fell to a low of $67.17 during the session, shedding 8% for the week. The Brent global benchmark saw a 9.8% decline.
OPEC+ has delayed plans to increase production, adding to market concerns about the global supply and demand balance. Meanwhile, Charles Schwab issued an apology following technical issues during the high-volatility trading session on August 5. The firm noted that a combination of high trading volumes and a vendor issue had affected its systems, leading to log-on difficulties for some clients.
Goldman Sachs’ chief economist Jan Hatzius projected that the Federal Reserve would likely lower interest rates by 25 basis points at its upcoming September meeting. Hatzius also forecasted three consecutive rate cuts of 25 basis points each by the end of the year. While there is some rationale for a 50-basis-point cut, a more cautious approach seems likely.
As markets navigate these turbulent waters, investors and analysts will be closely monitoring the Federal Reserve’s next moves and the ongoing developments in the global economy.
