US markets open muted after weaker than expected August payrolls data

Rate-sensitive growth stocks such as Alphabet and Tesla fell 2.8% and 5.4%, respectively, while Nvidia lost 4.4%, nearing the level of $100 last seen in early August.

 

“There’s uncertainty about what the Fed is going to do,” said Melissa Brown, managing director of investment decision research at SimCorp.

 

“We certainly would like to see rates come down, but on the other hand could an aggressive move suggest that they see something that makes them think the economy is worse off than we thought?”

 

Meanwhile, some policymakers said they are ready to lower interest rates at the Fed’s meeting in two weeks, with one of them saying he could support a bigger cut in borrowing costs, should the cooling labor market need support.

 

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 11:44 a.m. ET, the Dow Jones Industrial Average fell 329.57 points, or 0.81%, to 40,426.18, the S&P 500 lost 81.01 points, or 1.47%, to 5,422.40 and the Nasdaq Composite lost 393.51 points, or 2.30%, to 16,734.15.

 

All major sectors on the S&P 500 were trending lower, led by a 2.6% 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 3%, its steepest decline in 18 months, led by a more than 6% slide 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 shed 9.2% 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 5.1% and Advanced Micro Devices shed 4.5%, sending the Philadelphia SE Semiconductor index down 4.2%.

 

The semiconductor index is set for its biggest weekly drop since March 2020.

 

Among others, Super Micro Computer dropped 6.4% after brokerage J.P. Morgan downgraded the AI server maker’s shares to “neutral” from “overweight”.

 

Declining issues outnumbered advancers by a 2.79-to-1 ratio on the NYSE and by a 3.37-to-1 ratio on the Nasdaq.

The S&P 500 posted 16 new 52-week highs and 12 new lows, while the Nasdaq Composite recorded 19 new highs and 134 new lows.

First Published: Sep 06 2024 | 7:40 PM IST