Stock Market Update: Stocks Pull Back After February Jobs Report
Stocks Trending in Afternoon Trading
Stocks lost momentum and turned downward during afternoon trading on Friday, as investors pulled back some after a powerful rally led by big tech names. The tech-heavy Nasdaq Composite lost 0.3% after a sharp gain the previous day, while the S&P 500 trended near the flatline and the Dow Jones Industrial Average increased by close to 0.3%. The market received a boost this week as Chair Jerome Powell told lawmakers that the Federal Reserve is “not far” from being confident inflation is in the right place for the central bank to start bringing down borrowing costs.
Unemployment Rate Increases, Jobs Beats Expectations
The February jobs report showed that the US economy added 275,000 jobs in February, surpassing Wall Street expectations. However, the unemployment rate ticked up to 3.9%, its first increase in four months. The increase in the unemployment rate is bolstering investor confidence that the Federal Reserve will cut rates following its June meeting. Futures on the three major averages were trading in red figures ahead of the jobs data.
European Central Bank and Bank of Japan
Policymakers from the European Central Bank have lined up to support a rate cut before their summer break as inflation falls faster than expected. Meanwhile, Bank of Japan officials are said to be warming to the idea of finally lifting rates out of the negative zone.
Earnings and Corporate News
Costco shares fell 7% after reporting a sales miss overshadowing an earnings beat. Broadcom’s revenue beat and forecast for $10 billion in sales of AI-linked chips failed to impress investors, sending the stock over 6% lower.
Commodities and Last Week’s Performance
Gold futures continued to rally, as spot gold eyed its biggest weekly jump in five months amid optimism for a mid-year Fed rate cut.
Market Observations
After a powerful surge, investors took a breather, sending stocks mostly lower during afternoon trading on Friday. The S&P 500 trended near the flatline, while the Dow Jones Industrial Average remained relatively unchanged. The tech-heavy Nasdaq Composite experienced a slight decline following a previous day’s sharp gain.
A Look at the Rent Market
The recent data from RealPage shows that rent growth in the US has remained flat in February compared to the previous year. The increase in apartment supply is putting downward pressure on rents, causing a muted growth in rental rates for professionally managed apartments. Austin experienced the biggest decline in rent growth, while Virginia Beach saw an uptick. Apartment occupancy remained steady at 94.1% in February.
