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Dow, S&P 500 fall for 4th straight day ahead of August jobs report

US stocks broadly closed higher on Thursday as bond yields rose and another pandemic-induced lockdown in the southwestern Chinese metropolis of Chengdu heightened concerns about economic growth. The Dow Jones Industrial Average and his S&P 500 Index fell for his fourth straight day, while the Nasdaq Composite posted his longest streak since February.

how stocks are traded
  • S&P 500 SPX,
    -1.07%
    He won 11.85 points (0.3%) and finished with 3,966.85.

  • Dow Jones Industrial Average DJIA,
    -1.07%
    It climbed 145.99 points (0.5%) and settled at 31,656.42.

  • NASDAQ Composite COMP,
    -1.31%
    It dropped 31.08 points (0.3%) to finish at 11,785.13.

On Wednesday, the Dow Jones Industrial Average fell 308 points (0.96%) to 31791, the S&P 500 fell 44 points (1.1%) to 3986 and the Nasdaq Composite fell 135 points (1.12%) to 11883. became. $500 has fallen in 7 of the last 9 trading days.

what drives the market

The Dow Jones Industrial Average and S&P 500 posted four consecutive days of declines after news of another COVID-19 lockdown in Chengdu, with U.S. stocks recovering from previous declines on Sept. 1. recovered. In China, her 21 million inhabitants of the southwestern city have been placed on a city-wide lockdown for at least four days.

Meanwhile, semiconductor stocks like Nvidia NVDA
-2.08%
and advanced micro device AMD,
-2.54%
They fell 7.7% and 3% respectively after the US government restricted the sale of certain products to China.

State Street’s senior global market strategist Marvin Law said China’s latest COVID regulations have “brought back an old nemesis to the market.” “We haven’t forgotten that China hasn’t fully reopened,” Lo said.

But lockdowns weren’t the only pessimistic economic news out of China on Thursday. The Caixin China Purchasing Managers Index fell to 49.5 in August from 50.4 in July, below the 50 points that separate contraction and expansion, according to data released Thursday by Caixin Media Co. and S&P Global.

Meanwhile, back in the US, investors digested Thursday’s report on weekly unemployment claims, showing the number of Americans filing for unemployment benefits fell to its lowest level in nine weeks.

look: ‘Bad news is good news’ for the current stock market — how this could end

The bond market also helped weigh on stocks as 2-year Treasury yields hit a 15-year high of TMUBMUSD02Y.
3.401%
At 3.520%, the 10-year government bond yield TMUBMUSD10Y,
3.198%
It climbed to 3.264%, the highest level since late June.

Rising bond yields help propel US dollar to multi-decade highs, ICE US dollar index DXY,
-0.07%
109.68, up 0.9%.

“I think the U.S. Treasury market holds the key to financial markets in general. I think higher yields will put more pressure on stocks, especially growth stocks whose valuations are unsustainable at the moment,” said Tavi Costa. . Portfolio his manager at Crescat Capital.

Cryptocurrency BTCUSD,
-0.20%
Bitcoin fell below $20,000 per coin on Thursday, down 1.1%.

News of lockdowns in China also weighed on oil prices, with West Texas Intermediate crude futures CL00,
+0.74%

CL.1,
+0.74%

CLV22,
+0.74%
October delivery was down $16.9, or 1%, to settle at $1,709.30.

In other economic news, the S&P Global US Manufacturing Purchasing Managers Index hit 51.5 in August. This is broadly in line with his previously published ‘flush’ estimate of 51.3, although he is down from 52.2 in July. The headline reading was the lowest since July 2020. His ISM manufacturing activity index for August held him steady at 52.8%, as employment and new orders rose and inflation weakened. The gauge fell to a 25-month low in July.

look: US likely added 318,000 jobs this month, but watch out for surprises in August

Looking ahead, investors are expected to receive August nonfarm payrolls data on Friday. This can affect stocks. Because more evidence of a strong labor market could prompt investors to brace for a more aggressive pace of rate hikes by her Fed. .

Friday’s Labor Department’s monthly employment report, which tracks public and private sector employment, is expected to show the economy added 318,000 jobs in August, up from 528,000 jobs created in July. much less than Wall Street Journal. The unemployment rate is he stable at 3.5% and average hourly earnings are estimated to rise 0.4% following his 0.5% rise in the previous month.

Tom Essaye, founder of the Sevens Report newsletter, said Friday’s jobs report could pose risks to the stock market.

“The labor market needs to show signs that it is on its way back to a state of relative equilibrium where the number of job seekers and vacancies are about the same. The Fed will continue to be more hawkish for longer, and that’s not good for stocks,” Essey said in a note Thursday.

look: What does Friday’s jobs report mean for markets? ‘Too hot’ could cause stocks to fall, market expert says

Featured stock
  • campbell soup company
    CPB,
    -0.49%
    When Hormel Foods Corporation
    HRL,
    -1.26%
    The S&P 500 closed 2% and 6.6% lower, the biggest drop outside of Nvidia.

  • Meta Platforms Inc. It rose 1.5% after rising earlier in the session on news that the company was considering launching paid products tied to various platforms.

  • Octa Co., Ltd.
    Mr. Okada
    +6.65%
    It ended 33.7% lower after management highlighted integration issues during the company’s earnings update.

— Jamie Chisholm contributed to this article.

Hear Carl Icahn at the Best New Ideas in Money Festival in New York on September 21st and 22nd. The legendary trader reveals his take on his market ride this year’s Wild.

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