NEW YORK: Wall Street’s main indexes fell on Thursday with investors cautious ahead of indications on the US economy and the monetary policy path after President Donald Trump signed a bill ending the longest government shutdown in the country’s history.
Markets and the Federal Reserve, which have been reliant on private sources for clues on economic health in the absence of official data, still expect to face gaps after the White House said employment and some inflation reports for October might never be released.
“There’s a lot of uncertainties about the state of the economy … what we’re going through is a little bit of a correction in the market in the AI sector and we’re seeing market rotation,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“What’s really weighing on investors now is the state of the economy and the prospects of a rate cut in December.”
At 11:46 a.m. ET, the Dow Jones Industrial Average fell 487.04 points, or 1.01 percent, the S&P 500 lost 87.37 points, or 1.28 percent, and the Nasdaq Composite lost 443.91 points, or 1.90 percent.
Information technology stocks and communication services were the biggest drags on the S&P 500. Heavyweights Nvidia and Alphabet lost 4 percent and 2.5 percent, respectively. The Magnificent Seven ETF slid 2.3 percent.
However, Cisco Systems rose 4.5 percent after the company raised full-year profit and revenue forecasts, betting on demand for its networking equipment.
Technology and AI names have come under pressure lately, with the Nasdaq set for its third straight session of declines, as investors rotated out of pricey tech stocks into traditionally defensive areas such as healthcare.
The Dow has benefited from the rotation, notching back-to-back record highs after lagging the S&P and the Nasdaq this year.
The S&P 500 Value index has gained about 1.6 percent so far this week, whereas its growth equivalent has dipped 0.3 percent.
Walt Disney fell 8.8 percent, weighing on the Dow. The media giant signaled it was grinding for a potentially prolonged fight with YouTube TV over distribution of its cable channels.
Recently, data from payroll processor ADP showed private employers shed over 11,000 jobs a week through late October and Indeed Hiring Lab showed a 16 percent drop in retail-related job postings in October from a year ago, pointing to continued weakness in the labor market.
Several Fed speakers expressed scepticism over another interest rate cut in December, prompting investors to scale back bets. Comments from more policymakers will be parsed through the day.
Comments
Comments are closed for this article.