Wall Street Woes: Stocks Plummet as Disappointing Jobs Report Seals Worst Week on Record
New York Stocks Fall on Disappointing Jobs Report, Worst Week on Record
The New York stock market closed weak on the 6th (local time) as the U.S. August employment growth rate fell short of market expectations. The New York stock market had its worst week this year due to concerns about the U.S. economic outlook and profit-taking in large technology stocks.
On this day, the Dow Jones Industrial Average closed at 43,454.11, down 410.34 points (1.01%) from the previous day. The Standard & Poor’s (S&P) 500 index closed at 5,408.42, down 94.99 points (1.73%) from the previous day, and the Nasdaq index, which is centered on technology stocks, closed at 16,690.83, down 436.83 points (2.55%) from the previous day. For the week, the S&P 500 index fell 4.3%, recording its worst week in 1 year and 6 months since March 2023.
Risk aversion grew as investors were disappointed by the August nonfarm payrolls report, which was considered a key indicator this week. Earlier this morning, the U.S. Department of Labor announced that U.S. nonfarm payrolls increased by 142,000 in August compared to the previous month.
The employment growth rate was larger than in July, but it fell short of market experts’ forecasts (161,000). The unemployment rate was 4.2%, down from 4.3% in July, in line with market expectations. It is interpreted that investors’ concerns have deepened as employment has fallen short of market expectations for two consecutive months, following signs of weakness in various economic sectors, including the recent slowdown in the manufacturing industry.
As more investors are taking profits, large technology stocks embroiled in controversy over overvaluation have fallen sharply. On the New York Stock Exchange, Amazon fell 3.7%, Meta fell 3.2%, and Alphabet fell 4.1%. AI chip leader Nvidia fell 4.1%, and Broadcom, which announced its future earnings outlook the day before that was below market expectations, plunged more than 10%.
The bond market also showed increased volatility after the August employment report was released. According to the electronic trading platform Tradeweb, the yield on the 2-year US Treasury note, which is sensitive to monetary policy, fell 8bp (1bp = 0.01% point) from the same time the previous day to 3.67% at the close of the New York Stock Exchange that day. The yield on the 10-year US Treasury note fell only 1bp (1bp = 0.01% point) from the same time the previous day to 3.72% at the close of the New York Stock Exchange that day.
International oil prices also fell sharply due to growing concerns about the U.S. economy. On the New York Mercantile Exchange, the closing price of West Texas Intermediate (WTI) crude oil futures for October delivery fell $1.48 (2.14%) from the previous day to $67.67 per barrel. The closing price of Brent crude oil futures for November delivery fell $1.63 (2.24%) from the previous day to $71.06 per barrel.
By Jeong Yu-rim