US stock market ends week with strong declines amid
(MENAFN) The U.S. stock market closed significantly lower on Friday, weighed down by a jobs report that suggested a continuing slowdown in the labor market but left traders uncertain about the Federal Reserve's approach to future interest rate cuts. The S&P 500 and Dow Jones Industrial Average both posted their largest weekly losses since March 2023, while the Nasdaq Composite recorded its most significant weekly drop since January 2022. The latest data from the Labor Department showed that U.S. employers added only 142,000 jobs in August, falling short of analysts' expectations, and the job growth figures for July were revised downward to 89,000, further missing forecasts. This employment data pointed to a cooling labor market, but it also raised questions about how aggressively the Federal Reserve might move to reduce interest rates in the coming months.
Market participants showed mixed reactions to the economic indicators. According to the CME Group's FedWatch tool, traders were pricing in a 73 percent chance of a 25 basis point rate cut by the Federal Reserve in September, with a smaller 27 percent likelihood of a more substantial 50 basis point cut. These expectations had shifted notably from a brief surge to 51 percent for a 50 basis point reduction immediately after the release of the jobs report, reflecting the uncertainty and volatility in investor sentiment. The subdued job growth figures, combined with the revised data, suggest that while the Federal Reserve may proceed with caution, there remains considerable ambiguity over the scale and timing of rate cuts.
The impact of the uncertain outlook for interest rates was evident across the major U.S. stock indices. The S&P 500 Index fell by 94.99 points, or 1.73 percent, to close at 5,408.42, while the Nasdaq Composite dropped 436.83 points, or 2.55 percent, to end at 16,690.83. The Dow Jones Industrial Average also declined, losing 410.34 points, or 1.01 percent, to finish the day at 40,345.41. These declines underscored the heightened investor anxiety about future monetary policy and its potential effects on the broader economy, as traders weighed the implications of slowing job growth against the possibility of less aggressive interest rate cuts by the Federal Reserve.
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