Dow Closes Down Amid Weak Jobs Report, Rate Cut Hopes
NEW YORK (september 6, 2024) – The Dow Jones Industrial Average closed lower Friday, as investors reacted to a weaker-than-expected U.S. jobs report and continued speculation about potential interest rate cuts by the Federal Reserve. The Dow finished down 220.43 points, or -0.48%, at 45,400.86. The S&P 500 closed at 6,481.50,down 20.58 points or -0.32%, while the NASDAQ Composite edged down 7.30 points, or -0.03%, to 21,700.39.
For the week, the Dow decreased by 0.3%, while the S&P 500 gained 0.3% and the NASDAQ increased by 1.1%.
The U.S. Labor Department reported the addition of only 22,000 jobs in August, significantly below the anticipated 75,000. This data fueled initial market optimism regarding potential Fed easing, with some investors predicting a possible 0.50% interest rate reduction as early as this month.Bank stocks were among the hardest hit, falling 2.4% within the S&P 500. Though,Broadcom shares surged 9.4% after announcing a $10 billion artificial intelligence (AI) order from a new customer and forecasting fourth-quarter revenue above estimates, providing some support to the market.
Analysts are now focused on next week’s inflation data, with the monthly Consumer Price Index (CPI) scheduled for release on Thursday.
“Employment report on Friday confirms the weak labor market. And is the reason to support interest reduction in the Fed meeting this month,” one analyst stated.
BOFA Global Research anticipates the Fed will lower interest rates by 0.25% in both September and december. LSEG data indicates the U.S. interest market assesses a 7% probability of a 0.50% rate cut at the September 16-17 meeting, and a 93% probability of a 0.25% reduction.
The prospect of lower rates boosted real estate stocks, up 1%, and the Philadelphia residential stock index, rising 2.1%.
Conversely, Kenvue shares dropped 9.3% following a Wall Street Journal report citing a source that linked the use of Kenvue’s Tylenol during pregnancy to potential autism occurrences. Lululemon Athletica also saw a notable decline, falling 18.6% after lowering its full-year forecast.
(Source: infoquest News Agency, September 6, 2024)
