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Stock market today: Dow slumps, Nasdaq whipsaws amid more soft labor market data

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Stock market today: Dow slumps, Nasdaq whipsaws amid more soft labor market data

US stocks wobbled on Thursday as investors digested more weaker-than-expected labor market data that could help set expectations for both interest rate cut hopes and the health of the US economy.

The S&P 500 (^GSPC) dipped as much as 0.6%, while the Dow Jones Industrial Average (^DJI) fell more than 350 points, or around 0.9%. The tech-heavy Nasdaq Composite (^IXIC) wavered between positive and negative territory. The gauges finished Wednesday’s volatile session mixed as their sluggish start to September continued.

Private employers in the US posted their smallest monthly hiring growth since January 2021, new data from ADP showed on Thursday. Private payrolls grew by about 99,000, well below expectations. Meanwhile, slightly fewer Americans filed a new claim for unemployment benefits last week. On Wednesday, government data showed job openings slumped.

Together, the jobs market data serves as an appetizer for Friday’s main-course jobs report for August, crucial to the Fed’s policy decision making and closely watched amid hopes for a “Goldilocks” economy.

The market is torn between conflicting impulses as data releases paint a downbeat picture of the economy. Recent soft readings make the case for deeper rate cuts. But they could also be a sign the US is on the brink of recession and a “soft landing” is no longer in the cards.

Traders see an almost 50-50 chance the Federal Reserve will lower rates by 0.5% at its September meeting.

Read more: Fed predictions for 2024: What experts say about the possibility of a rate cut

On the corporate front, earnings from HPE (HPE) and C3.ai (AI) shed some light on prospects for AI growth. C3.ai shares slumped 11% after the enterprise AI software maker posted weak subscription revenue. HPE stock slipped as lower amid disappointment over its profitability.

Meanwhile, Tesla (TSLA) pared earlier gains to rise 3%. The company plans to stick with plans to launch its Full Self-Driving software in China and Europe pending approval from regulators.

Live6 updates

  • Banks posted solid second quarter profits. The bad news? The rate of dicey loans stayed at an 11-year high.

    Yahoo Finance’s David Hollerith reports:

    Second quarter profits climbed for the US banking industry from the previous quarter. But credit quality continued to worsen, according to the FDIC’s quarterly report.

    The banking sector’s mixed picture for the second quarter sets it on decent footing ahead of the Federal Reserve’s signal it will begin lowering its benchmark interest rate in a matter of weeks.

    “The banking industry continued to show resilience in the second quarter. However the industry still faces significant downside risks from uncertainty in the economic outlook, market interest rates and geopolitical events,” FDIC acting Chair Martin Gruenberg said in a statement.

    Read more here.

  • Mortgage rates remain steady as Fed rate cut looms

    The average rate on the 30-year fixed-rate mortgage was unchanged this week as investors continue to expect the Federal Reserve will cut interest rates later this month.

    The rate was steady from a week ago at 6.35%, Freddie Mac reported on Thursday. A year ago, the average rate on a 30-year fixed-rate loan was 7.12%.

    Separately, the average rate for the 15-year fixed mortgage was 5.47%, down from 5.51% a week prior. The rate on a 15-year loan was 6.52% a year ago.

    “Mortgage rates remained flat this week as markets await the release of the highly anticipated August jobs report,” Sam Khater, Freddie Mac’s chief economist, said in a press release.

    Overall, mortgage rates have been on a downward trend since May.

    “Even though rates have come down over the summer, home sales have been lackluster. On the refinance side however, homeowners who bought in recent years are taking advantage of declining mortgage rates in order to lower their monthly payments,” the economist said.

  • Dow drops more than 350 points, Nasdaq erases early session gains

    The Dow (^DJI) dropped more than 350 points on Thursday, leading the overall markets lower.

    The S&P 500 (^GSPC) fell 0.4%6 while the tech-heavy Nasdaq Composite (^IXIC) erased early session gains to fall 0.2%.

    The major averages have whipsawed through the session as investors digest weaker than expected private payroll data ahead of Friday’s monthly jobs report.

    Industrials, Healthcare and Financials led the declines on Thursday while Consumer Discretionary related stocks clung to modest gains.

  • Oil jumps 2% as OPEC+ delays plans to increase production next month

    Oil futures jumped more than 2% on Thursday after alliance OPEC+ delayed the rollback of some of its voluntary production cuts, meaning it will not dump more barrels into the market.

    On Thursday, West Texas Intermediate (CL=F) hovered above $70 per barrel, while Brent (BZ=F), the international benchmark, rose to $74 per barrel.

    The decision as reported by Bloomberg, comes after oil prices lost all their year-to-date gains amid concerns over a slowing Chinese economy and the market’s anticipation of more supply. The oil alliance’s two-month delay means OPEC+ members will not hike output by additional 180,000 barrels per day in s

  • Nasdaq, S&P 500 rise as Tesla shares surge

    The S&P 500 (^GSPC) gained 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) rose 1%, with Consumer Discretionary stocks leading the gains.

    EV maker Tesla (TSLA) rose more than 6% on news it plans to stick with its launch of full self-driving capabilities in Europe and China next year. Meanwhile, e-commerce giant Amazon (AMZN) gained 2%. Shares of AI chip giant Nvidia (NVDA) also moved up more than 2%.

  • S&P 500, Nasdaq waver amid more soft jobs market data

    US stocks were little changed at the open on Thursday after more soft labor data trickled in ahead of Friday’s big jobs report, which could influence the Federal Reserve on the size of its expected interest rate cut at its September meeting.

    The S&P 500 (^GSPC) hugged the flat line while the Dow Jones Industrial Average (^DJI) fell slightly. The tech-heavy Nasdaq Composite (^IXIC) erased earlier losses to rise 0.6%.

    New ADP data released before the market open showed private employers in the US posted their smallest monthly hiring growth since January 2021. Private payrolls grew by about 99,000, well below expectations.

    Along with the monthly jobs report, the labor data could influence the Federal Reserve on the size of the interest rate cut it will likely announce following its two-day meeting this month.

    On the corporate front, C3.ai (AI) shares tanked nearly 20% after the enterprise software maker posted weaker-than-expected subscription revenue. Shares of the once high-flying stock are negative for the year.

    Meanwhile, HPE (HPE) stock slipped on disappointment over the profitability of its AI serversy.

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