S&P 500 posts worst week since March as weak jobs report sparks sell-off in tech and semiconductor stocks
The S&P 500 experienced its sharpest weekly decline since March 2023 on Friday, as investors reacted to a weaker-than-expected August jobs report and sold off major technology stocks, according to CNBC.
The index fell 1.73 percent, closing at 5,408.42. The Nasdaq Composite dropped 2.55 percent to 16,690.83, ending more than 10 percent below its all-time high. The Dow Jones Industrial Average also fell, losing 410.34 points, or 1.01 percent, to settle at 40,345.41.
Emily Roland, co-chief investment strategist at John Hancock Investment Management, noted the market's recent volatility, stating that it reflects “growth concerns” as investors grapple with uncertainty.
“The market’s oscillating between this idea of is bad news bad news, or is bad news good news, and the sense that it may revive hopes that the Fed moves more aggressively than markets anticipate,” she said.
Investors pulled out of megacap tech stocks amid growing concerns about the US economy. Amazon slid 3.7 percent, while Alphabet fell 4 percent. Meta Platforms lost over 3 percent, and Broadcom dropped 10 percent following disappointing quarterly guidance.
Semiconductor stocks also fell, with Nvidia and Advanced Micro Devices both dropping around 4 percent. The VanEck Semiconductor ETF (SMH) declined 4 percent, marking its worst week since March 2020.
The week was tough across the board for equities. The S&P 500 declined 4.3 percent over the week, its worst performance since March 2023. The Nasdaq fell 5.8 percent, marking its worst week since 2022, while the Dow Jones slumped 2.9 percent.
The release of the US August jobs report further heightened concerns about the economy. Nonfarm payrolls increased by 142,000, well below the expected 161,000 predicted by economists in a Dow Jones poll. Despite this, the unemployment rate edged down to 4.2 percent, meeting expectations.
This weak data has intensified worries about the overall economic health, leading to a reduced appetite for risk among investors.
Charles Ashley, portfolio manager at Catalyst Capital Advisors, emphasized that the market is looking to the Federal Reserve for guidance.
Investors widely expect the Fed to cut interest rates by at least a quarter of a percentage point at its upcoming policy meeting, but recent trends in the labour market have raised the possibility of a larger cut.
Traders are currently split on whether the central bank will cut by a quarter- or half-percentage point, according to the CME Group FedWatch Tool.
