Traders work on the floor of the New York Stock Exchange during afternoon trading on Sept. 5, 2024.
Michael M. Santiago | Getty Images
The S&P 500 fell slightly Friday, and headed for its worst week since April, as investors assessed a weaker-than-expected August jobs report and its implication on U.S. monetary policy.
The broad index lost 0.3%, while the Nasdaq Composite declined 0.8%. The Dow Jones Industrial Average rose 145 points, or 0.4%.
Popular semiconductor stocks lagged after Broadcom forecast fiscal fourth-quarter revenue that came up short of analyst estimates. Shares shed 9%, while Nvidia, Advanced Micro Devices and Marvell Technology slumped at least 2% in sympathy. The iShares Semiconductor ETF declined 2%.
Fresh August jobs data showed further signs of a slowing labor market as growth fears mount on Wall Street. Nonfarm payrolls grew by 142,000, versus a 161,000 gain expected by economists polled by Dow Jones. However, the unemployment rate edged down to 4.2%, in line with expectations.
“August payroll data indicate risks are rising as the labor market is clearly softening, and the Fed needs to step in to cut off tail risks,” said Sonu Varghese, global macro strategist at Carson Group. “The report seals the deal for a September rate cut, but the big question really is whether the Fed goes big (by cutting 50 bps) to get in front of rising risks.”
The data will influence the Federal Reserve’s monetary policy decision later this month. A bout of weak labor data has fueled concerns about the health of the economy, spooking markets and denting risk appetite in recent weeks.
Investors remain optimistic that the Fed will cut rates by at least a quarter-percentage point at the conclusion of the September policy meeting. Nearly half of traders are currently pricing in a 50 basis point cut, according to CME Group FedWatch tool.
Friday’s data print comes on the heels of a rocky week for equity markets. The S&P 500 is on pace for a 2.4% decline and its worst week since April, while the Nasdaq is down 3.5%. The 30-stock Dow has slumped 1.3%.