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U.S. stocks fell sharply on Friday after a weak August jobs report raised fears of a recession.
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The S&P 500 had its worst week since March 2023, falling about 4%.
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The Federal Reserve is expected to cut interest rates by 25 basis points at its September 18 meeting.
U.S. stocks fell sharply on Friday after a weaker-than-expected August jobs report sparking new fears of recession.
THE S&P 500 closed its worst week since March 2023, falling about 4% over the week, while the Nasdaq 100 fell by almost 6%.
THE The U.S. economy created 142,000 jobs in Augustbelow the average estimate of economists of 164,000. The unemployment rate fell from 4.3% to 4.2%.
While the jobs report was not as shocking as July’s, which saw the unemployment rate unexpectedly rise, it confirmed the slowdown in the labor market and the need for the Federal Reserve to cut interest rates at its September 18 policy meeting.
New York Fed President John Williams said in a speech Friday that It’s time to cut rates.
« It is now appropriate to reduce the degree of monetary policy restriction by reducing the target range for the federal funds rate, » Williams said.
According to the CME’s FedWatch tool, the market expects the Fed to cut interest rates by 25 basis points by the end of the month. Rates were hovering between 25 and 50 basis points earlier in the day.
The August report shows in stark detail how the U.S. labor market has weakened in recent months, with the three-month moving average of monthly job creation falling from just under 270,000 in March to just over 110,000 in August.
JPMorgan wrote after the report that the data indicated a « decline in strength » in the labor market and should prompt the Fed to cut more, by 50 basis points, at its next meeting.
But the stock market’s weakness over the past week is typical, according to Fundstrat’s Tom Lee, who believes the decline is just in time given the low seasonality of September.
“While we are cautious for the next 8 weeks, for us, stocks are at the low end of the range, and we see more upside than downside,” Lee told clients in a note Friday.
Analysts at Ned Davis Research echoed that sentiment, saying the September selloff was ultimately a buying opportunity as the stock market approached its best three-month period of the year.
Here’s where the U.S. indices stood at 4 p.m. Friday close:
Here’s what else happened on Friday:
In commodities, bonds and cryptocurrencies:
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West Texas Intermediate Crude oil fell 1.55% to $68.08 a barrel. Brent crude oilthe international benchmark, fell 1.83% to $71.36 a barrel.
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Gold was down 0.82% at $2,522.20 an ounce.
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The 10-year Treasury yield fell one basis point to 3.719%.
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Bitcoin fell 4.48% to $53,651.
Read the original article on Business Insider
