Another rout hit Wall Street on Friday, with formerly high-flying technology stocks again taking the brunt, after a highly anticipated update on the US job market came in weak enough to add to worries about the economy.
- The Dow fell 410.34 points, or 1%, to 40,345.41.
- The S&P 500 fell 94.99 points, or 1.7%, to 5,408.42. That made the week its worst since March 2023.
- The Nasdaq fell 436.83 points, or 2.6%, to 16,690.83.
Broadcom, Nvidia, and other tech companies led the market lower as worries continue that their prices soared too high in the boom around artificial intelligence, and they dragged the Nasdaq composite down, the AP reports. Sharp swings also hit the bond market, where Treasury yields tumbled, recovered, and then fell again after the jobs report showed US employers hired fewer workers in August than economists expected. It was billed as the most important jobs report of the year, and it showed a second straight month when hiring came in below forecasts. It also followed recent reports showing weakness in manufacturing and some other areas in the economy.
Such a softening of the job market is just what the Federal Reserve and its chair, Jerome Powell, have been trying to get in order to stifle high inflation, "but only to a certain extent and the data is now testing Chair Powell's stated limits," said Scott Wren, senior global market strategist at Wells Fargo Investment Institute. Friday's data raised questions about how much the Federal Reserve will cut its main interest rate by at its meeting later this month. The Fed is about to turn its focus more toward protecting the job market and preventing a recession after keeping the federal funds rate at a two-decade high for more than a year. (More Wall Street stories.)
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