What began as a banner day for stocks turned into a major rout, as investors signaled ongoing skepticism about the longevity of the artificial intelligence boom and trimmed hopes of support from the Federal Reserve. <\/p>\n
The tech-heavy Nasdaq fell 2%, and the broad S&P 500 index dropped by more than 1.5%. The Dow Jones Industrial Average, which tracks 30 top-tier stocks, declined by nearly 390 points. It had been up 700 points earlier in the day. Cryptocurrencies also shed billions in value: Bitcoin had fallen below $87,000 as of late Thursday afternoon, weeks after having set highs above $120,000.<\/p>\n
The stunning turnaround added further unease to an already shaky economy that has forced households to trim budgets amid stubborn inflation and signs of a wavering job market. With an ever-increasing part of the economy\u2019s principal driver \u2014 consumer spending \u2014 now reliant on affluent households, an extended market pullback could inflict wider damage. <\/p>\n
\u2018You don\u2019t have to have the biggest bubble in history for an expensive stock market\u2019 and end up seeing declines, said Matt Maley, chief market strategist at Miller Tabak asset management group. <\/p>\n
Traders\u2019 hopes were boosted early Thursday by a better-than-expected jobs report that appeared to show the economy remained resilient. Even before the day began, stocks looked poised to rise after Nvidia, the chipmaker at the heart of the AI boom, reported strong quarterly earnings and revenue. <\/p>\n
Yet by midday, markets had turned red. The solid September jobs report diminished the odds that the Federal Reserve will cut interest rates next month to lower the cost of borrowing money to spur economic activity. When investors don\u2019t have to pay as much in interest, they often put those savings into stocks. <\/p>\n
\u201cThe broad rebound in payrolls suggests diminished risks of a higher unemployment rate,\u201d analysts with Morgan Stanley said in a note published shortly before noon. \u201cWe no longer expect a Fed cut in December.\u201d<\/p>\n
Losses were further compounded by ongoing concerns about AI \u2014 specifically, how much more profitable the companies buying chips like Nvidia\u2019s will be. The fears were articulated Wednesday evening on X by Michael Burry, made famous by the movie \u2018The Big Short.\u2019<\/p>\n
\u2018Just because something is used does not mean it is profitable,\u2019 he wrote. <\/p>\n
Finally, the ongoing sell-off of bitcoin indicated to some traders that a key source of support for stocks \u2014 retail or day traders \u2014\u00a0were beginning to waver on their trademark \u2018buy the dip\u2019 mentality.<\/p>\n
\u2018I wouldn\u2019t say we\u2019ve flipped from bull to bear,\u2019 said Steve Sosnick, chief strategist at Interactive Brokers financial group. \u2018I would say we\u2019ve flipped from bull to balanced market in the short term. A lot depends on whether sentiment continues to weaken.\u2019<\/p>\n
Stocks had already been showing signs of flagging in recent weeks. With Thursday\u2019s losses, the S&P 500 fell to its lowest point since September. <\/p>\n
The long-delayed September jobs report, which showed that the United States added a sturdy 119,000 jobs, appeared to show some glimmers of hope for the economy. <\/p>\n
Although the unemployment rate ticked up from 4.3% in August to 4.4%, about 450,000 workers entered the labor force. Economists view that as evidence that job opportunities are still plentiful, despite a wave of corporate layoffs. <\/p>\n
Just before the Bureau of Labor Statistics released the jobs report, Verizon told employees it planned to lay off 13,000 employees, or about 13% of its workforce. <\/p>\n
The company joined a suite of other blue-chip employers that say they plan to eliminate tens of thousands of jobs, including Amazon, General Motors, IBM, Microsoft, Paramount, Target and UPS.<\/p>\n
The details of the jobs report, which captured conditions before the government shutdown, as well more recent jobs data, suggested a more mixed picture for the U.S. economy. <\/p>\n
Manufacturing shed 6,000 jobs, continuing a trend in a sector the Trump administration has touted as a key target of its economic policies. Transportation and warehousing also lost 25,300 jobs. Wage growth slowed, and job totals for July and August were revised downward. <\/p>\n
The employment gains in September were concentrated in the health care, hospitality and social assistance sectors.<\/p>\n
Another snapshot of the economy came courtesy of Walmart, which on Thursday reported strong sales and raised its outlook for the year. That strength points to cracks in the economy, though. Executives said the chain is luring more high-income shoppers who are looking for bargains, and noted that lower-income families are feeling more pressure. <\/p>\n
\u2018As pocketbooks have been stretched, you\u2019re seeing more consumer dollars go to necessities versus discretionary items,\u2019 Chief Financial Officer John David Rainey said on an earnings call Thursday morning.<\/p>\n
Walmart\u2019s stock closed 6.5% higher. <\/p>\n<\/p>\n
What began as a banner day for stocks turned into a major rout, as investors signaled ongoing skepticism about the longevity of the artificial intelligence boom and trimmed hopes of support from the Federal Reserve. The tech-heavy Nasdaq fell 2%, and the broad S&P 500 index dropped by more than 1.5%. The Dow Jones Industrial […]<\/p>\n","protected":false},"author":0,"featured_media":22683,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-22682","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/22682","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=22682"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/22682\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/22683"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=22682"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=22682"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=22682"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}