U.S. stock futures slid Friday as a much weaker-than-anticipated jobs report for July ignited worries that the economy could be falling into a recession. Dow Jones Industrial Average futures lost 536 points, or 1.3% a day after the Dow lost 495 points. Futures tied to the S&P 500 fell 1.6%, and Nasdaq 100 futures dropped 2.3%. All three headed for weekly declines. July job growth in the U.S. slowed more than expected, while the employment rate rose to the highest since October 2021. Nonfarm payrolls grew by just 114,000 last month, the Labor Department reported, a slowing from 179,000 jobs added in June and below the 185,000 expected by economists polled by Dow Jones. The unemployment rate increased to 4.3%. In premarket trading, Amazon led the losses, sliding 9% after missing the Street’s estimates on second-quarter revenue and issuing a disappointing forecast. Intel cratered nearly 24% after announcing weak guidance and layoffs. Apple shares inched lower despite the iPhone maker posting a fiscal third-quarter earnings beat as most tech stocks were hit hard following the weak jobs figures. Nvidia lost 5% in premarket trading following a 6% loss a day before. Stocks with the most to lose from a recession also declined. Bank of America lost 2% and Caterpillar shares were also lower. The 10-year Treasury yield fell to its lowest since February as investors flooded into bonds for safety. Friday’s stock pullback would build on a steep sell-off from the previous session. The Dow and S&P 500 each fell more than 1% on Thursday, while the Nasdaq slid 2.3%. Those declines sent ripples around the world, with the Japanese Nikkei losing 5.8% overnight. It’s been a volatile week with the stock market rallying Wednesday when the Federal Reserve gave a strong hint that a rate cut was coming at its next meeting in September, while keeping rates at current levels. After these weak job figures, many investors are starting to believe maybe the central bank should have acted on Wednesday. The market is now “wondering if the Fed is too late in transitioning monetary policy,” said Quincy Krosby, chief global strategist at LPL Financial. The recent rally in small-cap stocks may also come under threat as investors become more nervous on the broader economic outlook, added Arnim Holzer, global macro strategist at EAB Investment Group. Indeed, the Russell 2000 lost 3% on Thursday, posting its worst session since February. “Increased market volatility is justified, with potential tech sector disappointments posing a risk to the overall market,” Holzer said. Russell 2000 futures were down another 3% in Friday premarket trading. The 10-year U.S. Treasury yield dropped below 3.8% on Friday after a weaker-than-expected jobs report added to fears of slowing growth. The yield on the benchmark 10-year Treasury hit a low of 3.79%, or its lowest level since December 2023 when it yielded as low as 3.783%. It was last at 3.824% after falling 15 basis points. Japan’s benchmark indexes nosedived on Friday, with most Asia-Pacific markets lower after a sell-off on Wall Street overnight on recession worries. The Nikkei 225 tumbled 5.81% to end at 35,909.7, marking its worst day since March 2020, according to Factset data, and dropping below 36,000 mark for the first time since January. The broader Topix saw a larger loss of 6.14%, marking its worst day in eight years and closing at 2,537.6. South Korea’s Kospi tumbled 3.65% to 2,676.19, seeing its worst day since August 2020 and dragged mostly by banking stocks, while the small-cap Kosdaq plunged 4.20% and reached its lowest level since November 2023. Australia’s S&P/ASX 200 fell 2.11% to close at 7,943.2, having its worst day since March 2023 and retreating from its all-time high on Thursday. Hong Kong’s Hang Seng index was 2.32% lower as of its final hour, while mainland China’s CSI 300 posted the smallest loss in Asia, dropping 1.02% to close at 3.384.39. Oil prices rose on Friday but were on course for a fourth successive weekly decline as signs of disappointing global fuel demand growth outweigh fears of supply disruptions on rising Mideast tensions. Brent crude futures gained 46 cents, or 0.6%, to $79.98 a barrel by 0841 GMT, while U.S. West Texas Intermediate crude futures rose 51 cents, or 0.7%, to $76.82. Both benchmarks have declined by more than 7% over the last four weeks in the longest streak of consecutive weekly losses this year. Gold prices were set for their best week since April, supported by safe-haven demand and expectations that the Federal Reserve would start cutting interest rates in September, with markets awaiting a key jobs report for further cues. Spot gold was up 0.7% at $2,463.46 per ounce as of 1105 GMT on Friday, just $20 shy of the record peak of $2,483.60 scaled on July 17. Bullion has gained 3.2% so far this week. U.S. gold futures climbed 1.1% to $2,508.00. “Gold prices are buoyed by rising expectations of rate cuts, driven by recent weak U.S. economic data… additionally, fears of a retaliatory strike by Iran and its proxies in the Middle East are bolstering gold’s appeal as a safe haven,” said Zain Vawda, market analyst at MarketPulse by OANDA.
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