The stock market took a beating on Friday, with the Dow Jones Industrial Average dropping over 400 points.
This decline came as investors digested a weaker-than-expected August jobs report and continued to sell off AI and tech stocks.
It’s been a rough start to September for the markets, and this latest tumble only adds to the pressure.
The U.S. economy added 142,000 nonfarm jobs in August, according to the Bureau of Labor Statistics.
That’s well below what economists predicted – they were expecting 160,000 new jobs.
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The unemployment rate stayed put at 4.2%, which was in line with what experts thought would happen.
This mixed bag of job data comes at a tricky time.
Many investors have been crossing their fingers for an interest rate cut from the Federal Reserve this month.
Economist @StephenMoore: "What is wrong with the economy is, we're running a $2 Trillion deficit… You've got a major presidential candidate [Kamala] who wants to raise taxes by $5 Trillion. It's the most insane proposal ever — it would destroy the stock market." pic.twitter.com/z3igZhJXO4
— Trump War Room (@TrumpWarRoom) September 6, 2024
But with these lukewarm job numbers, it’s anyone’s guess what the Fed will do next.
By Friday afternoon, the damage was clear across the board.
The Dow was down 1%, sitting at 40,348 points. The tech-heavy Nasdaq took an even bigger hit, dropping over 2.4%. The S&P 500 wasn’t far behind, losing 1.6%.
Tech stocks were hit particularly hard.
Take Broadcom, for example. The company reported $13 billion in revenue for the third quarter, beating expectations by a hair.
But its forecast for the next quarter fell short of what analysts were hoping for. The result? Broadcom’s stock price plummeted 9% to $138 per share.
Other big tech names weren’t spared either.
Amazon and Google’s parent company, Alphabet, both saw their stocks fall more than 3%. Meta dropped over 2.5%. Tesla had it even worse, with its stock price plunging more than 6%.
The pain spread to the semiconductor industry too.
#StockMarket today: #Stocks erase gains, head for big weekly losses after jobs report – Yahoo Finance: #StockMarket today: #Stocks erase gains, head for big weekly losses after jobs report Yahoo Finance https://t.co/L2bF0sGU4K
— Stock Market News (@Stock_Market_Pr) September 6, 2024
Nvidia and Advanced Micro Devices both took a 4.8% hit, while Super Micro Computer saw its stock price nosedive 6.5%.
What’s behind all this tech trouble?
It looks like investors are getting nervous about the health of the U.S. economy.
They’re pulling back from riskier investments, which often means tech stocks are the first to feel the pinch.
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As we head deeper into September, market watchers will be keeping a close eye on these trends.
The combination of slow job growth and a shaky tech sector could spell trouble ahead. And everyone will be waiting to see what the Federal Reserve does next.
Their decisions in the coming weeks could have a big impact on where the market goes from here.
