The recent volatility in the U.S. stock market has been exacerbated by unexpected employment data, leading to a significant decline in major indexes. Following the announcement of a surprising spike in unemployment rates, coupled with disappointing job creation figures, investors reacted swiftly, resulting in widespread sell-offs across various sectors. This unforeseen economic indicator has raised concerns regarding the resilience of the labor market and its implications for broader economic growth.
The unemployment rate's unexpected rise challenges previous assumptions about a steady recovery post-pandemic. Economists had anticipated a gradual improvement; however, the latest figures suggest potential underlying weaknesses within the economy that could hinder recovery efforts. The jobs report indicated not only fewer new jobs than projected but also revisions downward for prior months’ data, which further fueled investor anxiety. Such discrepancies highlight uncertainties surrounding labor demand and supply dynamics, prompting questions about consumer spending and overall economic health.
The tech-heavy Nasdaq Composite officially entered correction territory, closing more than 10% below its July 10 peak. Meanwhile, the CBOE Volatility Index, better known as the VIX, soared as much as 60% to 29.66, its highest level since March 2023.
Bond yields plunged, with the 10-year US Treasury yield falling 18 basis points to 3.79%, its lowest level all year.
The stock fell further below its 50-day line in heavy volume and gapped below its 200-day line. It also gave back gains from a cup-base breakout at 3,918 and is about 14% below the entry. Shares triggered the 7% sell rule after breaking below the 50-day line last week. The stock has lost around 5% so far this year.
Atlassian (TEAM) cratered nearly 18% in heavy volume after the collaboration software maker topped fiscal fourth-quarter adjusted profit forecasts and slightly beat sales views. But it gave fiscal first quarter revenue guidance that disappointed.
Helpfully for Wall Street, other areas of the stock market beaten down by high interest rates began rebounding sharply last month when tech stocks were regressing, particularly smaller companies. But they tumbled too Friday on worries that a fragile economy could undercut their profits.
The Russell 2000 index of smaller stocks dropped 3.5%, more than the rest of the market.
All told, the S&P 500 fell 100.12 points to 5,346.56. The Dow dropped 610.71 to 39.737.26, and the Nasdaq composite fell 417.98 to 16,776.16.
INTC suffered its worst session in half a century to close at levels last seen more than 10 years ago. The once mighty tech titan has been a catastrophe for buy-and-hold investors. Indeed, anyone who put $1,000 into Intel stock 20 years ago should be horrified by what the investment is worth today.
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