Stock Slide as Investors Wrestle With Shifting Bets on Rate Cuts

Published On Sep 6, 2024, 2:43 PM

The U.S. stock market faced a tough week, with significant declines following disappointing labor market data. The S&P 500 fell 1.7%, marking its worst week since March 2023. Job creation was weaker than expected, with only 142,000 jobs added in August, and previous months' figures were revised downward. Amidst these developments, a Federal Reserve governor suggested the possibility of larger rate cuts to support the economy, heightening investor anxiety. Despite a strong start to the year, the current outlook has made investors cautious, particularly regarding future central bank actions.

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Stock Forecasts

SPYView SPY chart on TradingView

Negative

Given the weaker labor market data and hints at potential larger rate cuts, investor sentiment is likely to remain negative in the short term. The market volatility increases the risk for equities, especially those that may be sensitive to economic slowdowns.

QQQView QQQ chart on TradingView

Negative

The anticipated shift in Fed policy to lower rates could benefit growth-oriented sectors, but investors are currently wary of downward pressure on the overall market due to recent job data. This could result in a continued bearish trend for the broader indices in the immediate future.

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