Weak U.S. Jobs Report Extends Steep U.S. and Global Markets Sell-off

Barry Adams
02 Aug, 2024
New York City

Market sentiment on Wall Street deteriorated in Friday's trading after a weak jobs report added to the string of economic reports suggesting a weakening U.S. economic backdrop. 

The S&P 500 index fell 2.2%, the Nasdaq Composite declined more than 2%, and the Russell 2000 index dropped more than 4%. 

Investors sold stocks amid growing evidence that the U.S. economy may face recessionary conditions after nonfarm payroll increases were sharply lower than expected. 

Earlier in the week, investors cheered Fed Chair Powell's comments, suggesting that a rate cut may be likely after the September meeting. 

However, market excitement turned to despair on Thursday after factory activities contracted for the third quarter in a row in July, and weaker-than-expected results from Amazon and Intel overshadowed market sentiment. 

In Friday's trading, market anxieties were further heightened by the fewer-than-expected increase in July payrolls. 

The U.S. economy added 114,000 net new jobs in July, following the downwardly revised 179,000 gains in June, the U.S. Bureau of Labor Statistics reported Friday. 

Total nonfarm payroll employment edged up, but the increase was below the average monthly gain of 215,000 over the prior 12 months. 

In July, employment continued to trend up in health care, in construction, and in transportation and warehousing, while information lost jobs.

Meanwhile, the jobless rate rose to 4.3%.

Average hourly earnings for all nonfarm payrolls increased by 8 cents, or 0.2%, from the previous month or 3.6% from a year ago to $35.07. 

For the week, the S&P 500 index is set to close down 3.5%, the Nasdaq Composite falls 4%, and the Russell 2000 index declines by 7.2%. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 2.2% to 5,314.60, the Nasdaq Composite fell 3.3% to 16,658.98, and the Russell 2000 index declined 4.1% to 2,098.06. 

The yield on 2-year Treasury notes edged lower to 3.82%, 10-year Treasury notes decreased to 3.91%, and 30-year Treasury bonds decreased to 4.15%.

WTI crude oil decreased $2.22 to $73.75 a barrel, and natural gas prices edged up 2 cents to $1.99 a thermal unit.

Gold decreased by $10.35 to $2,435.22 an ounce, and silver declined by $0.29 to $28.18. 

The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 103.20.

 

U.S. Stock Movers 

Apple Inc. increased 2.2% to $222.75 after the iPhone maker reported better-than-expected quarterly results, and sales hit hew highs amid rinsing sales in India. 

Amazon.com Inc. dropped 12.2% to $161.83 after the online retailer and cloud service provider reported weaker-than-expected second quarter revenue and issued a disappointing estimate. 

Intel plunged 29% to $20.74 after the advanced chipmaker reported weaker-than-expected second quarter results, announced job cuts of 15,000, and issued a weak outlook. 

Exxon Mobil inched up 0.1% to $117.05 after the energy company reported better-than-expected quarterly earnings driven by record energy production in Guyana and the Permian Basin. 

Chevron Corp. declined 2.5% to $148.85 after the energy company reported weaker-than-expected second-quarter earnings due to weak crude oil refining margins.