The Nasdaq Composite is on pace to confirm a correction, falling over 10% from its July peak, as a weaker-than-expected jobs report exacerbated fears of a slowdown in the US economy. Amazon and Intel led the decline, with their stocks sinking 11.7% and 26.7%, respectively.
Weak Jobs Report Sparks Concerns
The Labor Department’s report showed nonfarm payrolls rose by 114,000 jobs in July, sharply lower than the 175,000 additions estimated by economists. The unemployment rate ticked higher, to 4.3%, from 4.1% a month ago.
Market Reaction
The Dow Jones Industrial Average fell 458.84 points, or 1.14%, to 39,889.13, while the S&P 500 dropped 82.67 points, or 1.52%, to 5,364.01. The Nasdaq Composite plummeted 405.96 points, or 2.36%, to 16,788.19.
Big Tech Stocks Struggle
Amazon’s slowing online sales growth and cautious consumer spending led to its stock decline. Intel’s forecast of lower-than-expected revenue and suspension of its dividend also contributed to its significant drop. Other chip stocks, including Nvidia, Broadcom, and Micron Technology, also fell.
Economic Fears Grow
Traders are now betting on a half-percentage-point rate cut by the Federal Reserve in September, versus the 25-bps cut expected before the data. The weak jobs report has sparked concerns about the economy, with the Sahm rule, a recession gauge, being triggered.
