Tech slide causes stock drop before jobs report: Market summary
Stock markets faced a setback as technology shares took a beating, adding to uncertainty surrounding the impact of trade disputes on global economies. The S&P 500 and Nasdaq 100 fell by 1.5% and 1.8%, respectively. Nvidia Corp. bore the brunt of the tech selloff, while Marvell Technology Inc. tumbled 19% due to disappointing outlook amid high expectations in the artificial intelligence sector. Meanwhile, Broadcom Inc. also saw a decline ahead of its earnings announcement. In contrast, Alibaba Group Holding Ltd. saw some gains after releasing its latest open-source AI model.
Concurrently, US jobless claims fell in the previous week, providing some respite amidst concerns about a weakening labor market, with recent data pointing in that direction. Analysts expect the upcoming employment report to show an increase in job growth, although the data doesn’t reflect the full impact of recent government cuts.
Chris Larkin from E*Trade at Morgan Stanley noted the importance of trade policy in the current market environment, overshadowing positive indicators such as the modest jobless claims decrease following the disappointing ADP report. Until the trade tensions ease, market activity might face continued bouts of volatility as traders and investors navigate the uncertainty.
Across the Atlantic, the European Central Bank decided to lower interest rates, marking the sixth instance since June. The bank hinted that the phase of rate cuts could be tapering off as inflation rates cool down, and the economy adjusts to geopolitical shifts.
Looking ahead, key events this week include the Eurozone GDP reading and the US jobs report. Federal Reserve Chair Jerome Powell will also deliver a keynote speech at an event hosted by the University of Chicago Booth School of Business. Other Fed officials including John Williams, Michelle Bowman, and Adriana Kugler are scheduled to speak, providing additional insights into the economic landscape.
Major moves in different markets indicated the broad impact of these developments. The S&P 500, Nasdaq 100, Dow Jones Industrial Average, and other indices experienced declines. Currencies responded with the Bloomberg Dollar Spot Index dipping while the euro and yen saw varied movements. Cryptocurrencies also saw fluctuations with Bitcoin and Ether showing signs of instability. In the bond market, yields on 10-year Treasuries and European government bonds shifted, reflecting changing investor sentiment. Commodities such as crude oil and gold saw mixed responses in the wake of economic developments.
This assessment of market trends and economic indicators was prepared in collaboration with Bloomberg Automation and multiple correspondents.