U.S. stocks ended sharply lower on Friday weighed down by a weaker-than-expected August jobs report while investors failed to assess the size of the Federal Reserve’s planned rate cut this month. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined 1% or 410.34 points, to end at 40,345.41 points.
The S&P 500 tumbled 1.7% or 94.99 points, to close at 5,408.42 points. Consumer discretionary, technology and communication services stocks were the worst performers.
The Consumer Discretionary Select Sector SPDR (XLY) fell 2.5%. The Technology Select Sector SPDR (XLK) slid 2.6%, while the Communication Services Select Sector SPDR (XLC) lost 2.1%. All the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 2.6% or 436.83 points to finish at 16,690.83.
The fear-gauge CBOE Volatility Index (VIX) was up 12.46% to 22.38. Decliners outnumbered advancers on the NYSE by a 33.08-to-1 ratio. On the Nasdaq, a 3.16-to-1 ratio favored declining issues. A total of 11.8 billion shares were traded on Friday, higher than the last 20-session average of 10.7 billion.
Weak Jobs Data Dent Investors’ Sentiment
Investors’ sentiment was further dented on Friday following the release of a softer-than-expected August jobs report. Markets have been rocky over the past few sessions after a spate of economic data released over the past couple of weeks raised concerns over the economy’s health.
On Friday, fresh data showed that nonfarm payrolls increased by 142,000 in August, sharply lower than the consensus estimate of a rise of 161,000. However, the unemployment rate fell to 4.2% in August.
Weak economic data has sparked worries of a cooling labor market and a softening economy. Megacap tech stocks plummeted following the release of the jobs data on Friday. Shares of Meta Platforms, Inc. META declined 3.2%. Meta carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Also, shares of Amazon.com, Inc. AMZN and Apple Inc. AAPL declined 3.7% and 0.7%, respectively.
Investors are expecting the Federal Reserve to cut interest rates by at least 25 basis points this month. A cooling labor market has also made several market participants believe that the central bank could go for a bigger rate cut. However, the Federal Reserve hasn’t given any clear picture of the size of the rate cut.
No other major economic data was released on Friday.
Weekly Roundup
The S&P 500 finished the week 4.3% lower, to record its worst week since March 2023. The Nasdaq ended down 5.8% to record its worst week since 2022. The Dow ended the weel 2.9% lower.
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