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US stocks took a nosedive on Friday following a disappointing August jobs report that heightened recession concerns.
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The S&P 500 experienced its worst week since March 2023, plummeting by approximately 4%.
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The Federal Reserve is widely anticipated to implement a 25 basis point interest rate cut at its meeting on September 18.
Stocks in the US plunged significantly on Friday after the release of a weaker-than-expected August jobs report, sparking fresh fears about a recession.
The S&P 500 concluded the week with its worst performance since March 2023, dropping by around 4%, while the Nasdaq 100 witnessed a nearly 6% decline.
The US economy added 142,000 jobs in August, falling short of the average economist estimate of 164,000. The unemployment rate decreased from 4.3% to 4.2%.
Although the jobs report wasn’t as alarming as the July data, which unexpectedly showed an increase in the unemployment rate, it underscored the cooling off of the labor market and the necessity for the Federal Reserve to lower interest rates at its upcoming policy meeting on September 18.
New York Fed President John Williams stated in a speech on Friday that it’s time to cut rates.
“It is now appropriate to dial down the degree of restrictiveness in the stance of policy by reducing the target range for the federal funds rate,” Williams remarked.
The market is anticipating a 25-basis-point interest rate cut from the Fed later this month, according to the CME FedWatch Tool. There was speculation earlier in the day about a potential cut ranging between 25 and 50 basis points.
The August report clearly illustrates the recent weakening of the US job market, with the three-month moving average of monthly job gains declining from just under 270,000 in March to slightly over 110,000 in August.
JPMorgan noted post-report that the data indicated the “waning vigor” of the labor market and advocated for a larger, 50-basis-point cut from the Fed at the upcoming meeting.
Regarding the stock-market downturn during the past week, Fundstrat’s Tom Lee suggested that this decline is right on time based on weak September seasonality.
“Even if we are cautious about the next 8 weeks, to us, stocks are at the lower end of the range, and we see more upside than downside,” Lee informed clients in a note on Friday.
Analysts at Ned Davis Research echoed this sentiment, stating that the September sell-off was ultimately a buying opportunity as the stock market approached its most favorable three-month period of the year.
Here’s where US indexes closed at 4 p.m. on Friday:
Here’s what else unfolded on Friday:
In commodities, bonds, and crypto:
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West Texas Intermediate crude oil declined by 1.55% to $68.08 per barrel. Brent crude, the global benchmark, dropped by 1.83% to $71.36 per barrel.
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Gold experienced a 0.82% decrease to $2,522.20 per ounce.
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The 10-year Treasury yield decreased by 1 basis point to 3.719%.
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Bitcoin saw a 4.48% drop to $53,651.
Read the original article on Business Insider