Stocks claw back after tough September start

US stocks recovered some losses on Wednesday morning, coming off a steep sell-off fueled by worries about economic growth and the factitious intelligence trade amid a slide in Nvidia (NVDA) shares.

The S&P 500 (^GSPC) was up 0.3% while the tech-heavy Nasdaq Composite (^IXIC) rose about 0.4%. Meanwhile, the Dow Jones Industrial Average (^DJI) added roughly 0.5%.

Stocks had pulled back as Nvidia shares slumped, a sign that faith within the AI boom that has driven much of this 12 months’s gains is seeping out of the market. The AI juggernaut lost $279 billion in market value on Tuesday. Nvidia shares were lower by greater than 3% Wednesday morning after US regulators reportedly stepped up an antitrust probe before reversing course and turning positive on the day.

Stocks appeared to show positive after fresh data showed further signs of the labor market cooling, prompting bond yields to fall and investors to ramp up their hopes for more extensive rate of interest cuts in 2024.

Data showed job openings fell to 7.67 million in July, the bottom level since January 2021. After the information, markets moved to cost in an almost 50% probability the Federal Reserve slashes rates of interest by 50 basis points by the top of its September meeting, up from a 38% probability the day prior, per the CME FedWatch Tool.

The 2-year treasury yield dropped nearly 10 basis points to three.79%, its lowest level of 2024.

Still, the up and down begin to September now has investors bracing for more volatility as a historically tough month for stocks follows a turbulent August. Though markets managed to shake off that month’s losses, analysts suggest stocks might not be within the clear yet.

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Wed, September 4, 2024 at 3:58 PM GMT+1

Stocks climb back as investors ramp up rate cut bets

After opening lower to begin the day, all three of the key indexes were higher just before 11 a.m. ET on Wednesday.

The S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) were each up 0.2%. Meanwhile, the Dow Jones Industrial Average (^DJI) added 0.4%.

Nvidia (NVDA), which had been down as much as 3% after US regulators reportedly stepped up an antitrust probe, now rose greater than 1%.

The move higher in stocks as comes as investors are amping up bets the Federal Reserve will cut rates of interest by 50 basis points in September following a weaker-than-expected reading on job openings for July.

Markets are actually pricing in an almost 50% probability the Federal Reserve slashes rates of interest by 50 basis points by the top of its September meeting, up from a 38% probability the day prior, per the CME FedWatch Tool.
Wed, September 4, 2024 at 3:05 PM GMT+1

Job openings fall to lowest level since January 2021

Job openings fell greater than expected in July as investors closely look ahead to signs of further cooling within the labor market because the Federal Reserve nears the beginning of its rate of interest cutting cycle.

Latest data from the Bureau of Labor Statistics released Wednesday showed there have been 7.67 million jobs open at the top of July, a decrease from the 7.9 million seen in June. This marked the bottom variety of job openings since January 2021.

June’s figure was revised lower from the 8.18 million open jobs initially reported. Economists surveyed by Bloomberg had expected the report to indicate 8.1 million openings in June.

The Job Openings and Labor Turnover Survey (JOLTS) also showed 5.5 million hires were made in the course of the month, a slight uptick from June. The hiring rate ticked as much as 3.5% in July, up from 3.3% in June.
Wed, September 4, 2024 at 2:37 PM GMT+1

Tech the lone laggard on the open

US tech stocks prolonged losses on Wednesday morning, coming off a steep sell-off fueled by worries about economic growth and the AI trade amid a slide in Nvidia (NVDA) shares.

The S&P 500 (^GSPC) fell about 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) led the losses, declining about 0.7%. Meanwhile, the Dow Jones Industrial Average (^DJI) added just lower than 0.1%.

Information Technology (XLK), led by a greater than 2% decline in Nvidia (NVDA), was the lone sector underperforming the S&P 500 on Wednesday morning, sliding greater than 1%.

Source: Yahoo Finance