Nasdaq Falls 2.6% as Wall Street Wraps Up a Tough Week
Historically, September is one of the worst months for stock market performance, and this year is proving no different as Wall Street's troubles deepen following Friday’s employment report, which revealed fewer jobs added than expected and heightened concerns that the U.S. Federal Reserve may be slow to adjust interest rates.
Despite the Labor Day break, Wall Street had a tough week, with all three main indexes declining.
The S&P 500 and Dow saw their largest weekly drops since March 2023, while the Nasdaq experienced its biggest weekly fall since January 2022.
The weakness intensified after the U.S. Labor Department's report showed the economy added 142,000 jobs in August, with the unemployment rate falling to 4.2% from 4.3%.
Following the data release, Wall Street traders anticipated a 50-basis points rate cut at the Fed’s September 17-18 meeting, with fewer traders expecting a 25-basis points reduction.
Fed Chair Jerome Powell and other officials have hinted at possible rate cuts this month but emphasised that decisions will depend on incoming data.
Preliminary data from the New York Stock Exchange (NYSE) show the Dow Jones Industrial Average fell 410.34 points, or 1.01%, to 40,345.41.
The Standard & Poor's 500 Index lost 94.99 points, or 1.73%, to 5,408.42, while the rich-tech Nasdaq Composite plummeted 436.83 points, or 2.55%, to 16,690.83.
Losses in major mega-cap growth stocks weighed on the indexes, including the so-called Magnificent Seven, with Tesla leading the decline after falling 8.4%, while Nvidia fell 4.1%.
Alphabet dropped 4.1%, Amazon declined 3.7%, Meta (formerly Facebook) decreased 3.2%, Microsoft was down 1.6%, and Apple slipped 0.7%.
Broadcom plunged 10.4% after forecasting fourth-quarter revenue that fell short of estimates, impacted by weak spending in its broadband segment.
Other chip stocks fell: Marvell Technology dropped 5.3%, AMD 3.7%, and the Philadelphia SE Semiconductor index 4.5%. Super Micro Computer fell 6.8% after J.P. Morgan downgraded its shares.
In the U.S. government bond markets, the yield on the 10-year Treasury, which influences mortgage rates and other economy-influencing loans, settled at 3.71%.
The policy-sensitive two-year yield, which closely tracks Federal Reserve interest rate adjustment expectations, closed at 3.65%.
Meanwhile, Bitcoin, the largest digital currency, stayed bearish, hitting its lowest level in a month. It traded between US$52,644 and US$56,969, closing at US$53,966 in New York.
With Bitcoin closing below the US$58,350 mark, the bullish sentiment has paused, shifting focus to the downside.
Initial support is seen at US$51,800, with further support at US$48,000; a bounce is anticipated from here.
Broadly, the upside should still be considered if an unexpected rebound occurs, though US$71,500 will pose a significant challenge.
Effective risk management and adaptable strategies are essential for navigating market volatility and seizing potential opportunities.
Ethereum mirrored Bitcoin's volatility, trading between US$2,151 and US$2,407 and closing at US$2,225.
Ethereum needs to close above US$2,870 to regain its bullish momentum and aim for US$4,000 despite recent volatility, though this currently seems unlikely.
Clearing the US$2,870 level is critical for sustaining the bullish outlook and making further gains.
Support is now seen at around US$1,950–US$1,980; reassessment at this level is suggested.
Given the high volatility, traders should remain cautious, monitor prices closely, and apply effective risk management and adaptable strategies to navigate the market and capitalise on potential opportunities.
Precious metal prices remained volatile, with Spot Gold closing lower at US$2,496 and silver closing at US$29.92.
Oil prices remained weak in the energy sector. Brent crude, the global benchmark, refreshed its lowest close since June 2023 for the fourth consecutive day, ending at $71.06.
Meanwhile, West Texas Intermediate (WTI) was at $67.52 a barrel, marking its lowest close since December.
Meanwhile, the U.S. Dollar Index (DXY) whipsawed and closed nearly flat at 101.15.
Meanwhile, the Eurodollar was 1.1084, and the British pound finished at 1.3125. The Japanese yen ended lower at 142.26, and the Australian dollar was at 0.66.68.
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