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US markets open muted after weaker than expected August payrolls data | World News
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The Dow Jones Industrial Average rose 1.1 points, or flat at the open, to 40756.81.
Wall Street’s main indexes fell on Friday after a crucial jobs report did little to clear the uncertainty around the magnitude of the Federal Reserve’s interest rate cut that is expected at the central bank’s meeting later this month.
A Labor Department report showed U.S. employment increased less than expected in August, but a drop in the jobless rate to 4.2% suggested an orderly labor market slowdown continued.
Traders’ bets for a 25-basis point rate cut in September stood at 53%, according to the CME Group’s FedWatch Tool. Bets for a 50-bps reduction in rates were at 47%, down from a brief rise to 51% after the data.
Rate-sensitive growth stocks were mixed. Apple rose 1%, while Tesla fell 2.9% and Nvidia lost 1.5%.
“The market is really struggling with this one … it’s in the middle of what could be used as a justification for either a 25- or 50-bps rate cut,” Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, said.
Federal Reserve Bank of New York President John Williams said a better balanced economy has opened the door to cutting rates, with the full course of action to be determined by how the economy performs.
The labor market has come under scrutiny after an unexpected rise in the jobless rate sparked recession fears nearly a month ago and had sent the tech-heavy Nasdaq down more than 10% into correction territory and led to a selloff in global markets.
At 10:23 a.m. the Dow Jones Industrial Average fell 27.15 points, or 0.07%, to 40,728.60, the S&P 500 lost 29.02 points, or 0.54%, to 5,473.70 and the Nasdaq Composite lost 171.46 points, or 0.99%, to 16,956.20.
Most of the S&P 500 sectors turned lower, led by a 1.6% drop in tech stocks.
Wall Street’s three main indexes were on track for a weekly loss. The benchmark S&P 500 was on course for a weekly drop of more than 2%, its steepest decline in nearly five months, led by a more than 5% fall in technology stocks.
September has been historically weak for U.S. equities, with the S&P 500 down about 1.2% for the month on average since 1928.
Broadcom slid 9.3% after the chipmaker forecast fourth-quarter revenue slightly below estimates, hurt by sluggish spending in its broadband segment.
Other chip stocks such as Marvell Technology dropped 3% and Advanced Micro Devices shed 1.5%, sending the Philadelphia SE Semiconductor index down nearly 2%.
The semiconductor index is set for its biggest weekly drop in more than a month.
Super Micro Computer dropped 4.5% after brokerage J.P.Morgan downgraded the AI server maker’s shares to “neutral” from “overweight”.
Declining issues outnumbered advancers for a 1.15-to-1 ratio on the NYSE and a 1.68-to-1 ratio on the Nasdaq.
The S&P 500 posted 14 new 52-week highs and three new lows, while the Nasdaq Composite recorded 19 new highs and 81 new lows.
First Published: Sep 06 2024 | 7:40 PM IST
