Dow drops 500 points after big U.S. jobs miss stokes recession worries: Live updates
Traders work on the floor of the New York Stock Exchange, January 27, 2020.
Spencer Platt
Stocks slid Friday as a much weaker-than-anticipated jobs report for July ignited worries that the economy could be falling into a recession.
The Dow Jones Industrial Average fell 528 points, or 1.3%. The S&P 500 dropped 1.5%, while the Nasdaq Composite lost 2.2%.
July job growth in the U.S. slowed more than expected, while the employment rate rose to the highest since October 2021. Nonfarm payrolls grew by just 114,000 last month, the Labor Department reported, a slowing from 179,000 jobs added in June and below the 185,000 expected by economists polled by Dow Jones. The unemployment rate increased to 4.3%.
Amazon led the losses, sliding 9% after missing the Street’s estimates on second-quarter revenue and issuing a disappointing forecast. Intel cratered 26% after announcing weak guidance and layoffs. Apple shares inched lower despite the iPhone maker posting a fiscal third-quarter earnings beat as most tech stocks were hit hard following the weak jobs figures.
Nvidia lost 4.5% following a 6% loss a day before.
Stocks with the most to lose from a recession also declined. Bank of America lost 3%, and Caterpillar shares were also lower. The 10-year Treasury yield fell to its lowest since February as investors flooded into bonds for safety.
Friday’s stock pullback would added to a steep sell-off from the previous session. The Dow and S&P 500 each fell more than 1% on Thursday, while the Nasdaq slid 2.3%. Those declines sent ripples around the world, with the Japanese Nikkei losing 5.8% overnight.
It’s been a volatile week with the stock market rallying Wednesday when the Federal Reserve gave a strong hint that a rate cut was coming at its next meeting in September, while keeping rates at current levels. After these weak job figures, many investors are starting to believe maybe the central bank should have acted on Wednesday.
The market is now “wondering if the Fed is too late in transitioning monetary policy,” said Quincy Krosby, chief global strategist at LPL Financial.
