U.S. stocks concluded the week with declines as investors grappled with mixed signals from the latest U.S. jobs report and a pause in the rally of the technology sector.
The S&P 500 closed Friday down by 0.7%, while the Dow Jones Industrial Average dropped 0.2%, and the Nasdaq Composite declined by 1.2%. All three indexes recorded weekly losses, with the Nasdaq falling by 1.2%.
The information technology sector was the weakest performer in the S&P 500 on Friday, with chip makers like Broadcom, Intel, Microchip Technology, and ON Semiconductor all experiencing declines of at least 4%. Broadcom’s profits fell short of Wall Street expectations, contributing to the sector’s downturn.
The so-called “Magnificent Seven” tech stocks, which have been driving the broader market higher in recent months, had a lackluster week, with all but Nvidia and Meta Platforms ending lower. Nvidia, in particular, experienced significant volatility, initially trading up more than 5% before closing down by 5.6%. Despite Friday’s decline, Nvidia shares are still up nearly 80% in 2024.
Art Hogan, chief market strategist at B Riley Wealth Management, remarked on the volatility in the market, stating, “That kind of volatility should be the norm, not the exception, when you get that large that fast.”
The February jobs report showed that U.S. employers added 275,000 jobs, surpassing economists’ expectations of 198,000. However, the unemployment rate ticked up to 3.9%, and wage growth slowed, prompting mixed reactions from analysts. While some viewed the robust job numbers positively, others expressed concerns about slowing wage growth and the possibility of a deteriorating labor market.
Wall Street is closely monitoring the Federal Reserve’s actions, with speculation about a potential rate cut at the central bank’s June meeting. Traders in interest-rate derivatives have increased the probability of a June rate cut to approximately 60%, up from about 40% a month ago.
In other markets, Treasury yields edged lower, and investors await the release of February’s consumer-price index for further insights into inflation. Costco Wholesale was among the S&P 500’s worst performers on Friday, falling 7.6% after its quarterly sales missed estimates.
Bitcoin reached a new record of $69,294, while gold prices continued their upward trend, settling at $2,178.60 for the week.
Overseas, the Stoxx Europe 600 ended the week at a record high, while Japan’s Nikkei 225 and Hong Kong’s Hang Seng experienced declines.
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