Stocks sink after jobs report, on track for big weekly losses

Published On Sep 6, 2024, 4:05 PM

US stocks experienced significant declines, particularly in the technology sector, as the Nasdaq Composite fell over 2.5% amid a volatile trading week. The August jobs report revealed only 142,000 jobs were added, below the expected 165,000, and despite a slight drop in the unemployment rate to 4.2%, signs of a cooling labor market raised concerns. This has shifted expectations towards a potential interest rate cut by the Federal Reserve at their upcoming meeting. Investors are particularly nervous about potential cuts being larger than previously anticipated. In corporate news, Broadcom's shares plunged over 10% due to a disappointing sales forecast, affecting other semiconductor stocks like Nvidia, which declined around 4%.

Stock Forecasts

The tech sector has shown vulnerability this week, with significant declines in key stocks indicating ongoing market skepticism. Following the weak jobs report and the potential for interest rate cuts, investors may prefer to divest from high-growth tech stocks until more stable indicators emerge.

Broadcom's poor sales guidance impacts market sentiment for tech stocks overall, revealing challenges in demand despite AI spending. Investors might be cautious about remaining in the semiconductor space until performance improves. Furthermore, as oil prices are also facing downward pressure due to fears of reduced demand, this sector also shows potential for declines.

While some believe the Fed will lean towards a significant cut, uncertainty regarding the market's direction could drive investors to more stable investments, potentially favoring energy or dividend-paying stocks amidst this market volatility.

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