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U.S. stock-index futures were wavering on Friday as investors parsed the better-than-expected August jobs report, following a blistering bout of selling, particularly in technology and other highflying sectors on Thursday as investors appetite for risky assets waned.
How are stock-market benchmarks performing?
Futures for the Dow Jones Industrial Average YM00, +0.55% YMU20, +0.55% were up 186 points, or 0.7%, at 28,532, those for the S&P 500 ES00, +0.17% ESU20, +0.17% were up 6.50 points at 3,468, a rise of 0.2%, while Nasdaq-100 futures NQ00, -0.72% NQU20, -0.72% were off 99 points at 11,701.50, a decline of 0.8%, off its worst levels of the early session.
On Thursday, the Dow DJIA, -2.77% DJIA, -2.77% ended with a loss of 807.77 points, or 2.8%, at 28,292.73, after dropping more than 1,000 points at its session low. The S&P 500 SPX, -3.51% closed 125.78 points lower, down 3.5%, at 3,455.06. The Nasdaq Composite COMP, -4.96% tumbled 598.34 points, or 5%, to end at 11,458.10. The declines marked the biggest one-day drops for all three indexes since June.
The fall came a day after the S&P 500 claimed its 22nd record close of the year, while the tech-heavy Nasdaq Composite arrived at its 43rd such all-time high and the Dow topped the 29,000 level for the first time since February. Thursday’s fall snapped a four-day win streak for the Nasdaq and a 10-day run of gains for the S&P 500’s tech sector.
In One Chart:Tech stocks and the rest of the market are both very expensive — but for very different reasons
What’s driving the market?
Markets early Friday were attempting to process a better-than-expected jobs report against the backdrop of the worst single-day decline since June produced on Thursday.
Data from the Labor Department showed that the economy regained 1.4 million jobs in August and the unemployment rate fell to 8.4% from 10.2%. Economists polled by MarketWatch had predicted an increase of 1.2 million jobs.
Private-sector payrolls rose by a smaller 1 million. Hours worked rose 0.1 hour to 34.6 hours. The increase in hiring in July was reduced slightly to 1.73 million. Job gains in June were little changed at 4.79 million.
Some investment bulls believe that Thursday’s downturn wasn’t indicative of a broader unraveling of the overall upbeat momentum for equities.
Peter Cardillo, chief market economist at Spartan Capital Securities, said “we don’t think yesterdays plunge will turn into meaningful correction.”
“In other words, yesterdays decline is likely to be short lived as rotation maybe unfolding,” he said.
That said, some market player see Thursday’s moves as just the start of a purge of excess on Wall Street after equities surged to records following coronavirus-induced lows in late March.
“Diminishing breadth, the weakest seasonal period of the year (even for election years), over extended rallies in specific mega-cap names, and an approaching presidential election that brings great uncertainty are all likely reasons for yesterday’s plunge in the market,” wrote Jeff deGraaf, founder of Renaissance Macro, in a Friday research note.
