US Stock Market Sees Significant Decline Amid Economic Concerns
The US stock market experienced a pronounced downturn on Thursday, as investors grappled with heightened valuations within the artificial intelligence realm and emerging indications of fragility in the US labor market.
The Dow Jones Industrial Average plummeted by 399 points, or 0.84%, concluding the day at 46,912. The S&P 500 recorded a descent of 1.12%, settling at 6,720, while the tech-oriented Nasdaq Composite suffered a steep fall of 1.9%, closing at 23,054. Notably, the Nasdaq 100 is currently poised for its most dismal week since early April.
Declines were predominantly seen in major technology firms, with Nvidia, Microsoft, Palantir Technologies, Broadcom, and AMD leading the charge downward. AMD alone fell by 7%, as robust earnings reports were insufficient to allay future demand anxieties.
Palantir and Oracle faced declines of 7% and 3%, respectively, while Qualcomm experienced a near 4% drop despite promising quarterly results, following warnings regarding potential losses in business with Apple. Nvidia and Meta also concluded the day in the red.
Valuation Pressures and Investor Hesitation
Numerous substantial technology entities remain under duress as investors reevaluate inflated valuations and constricted profit forecasts.
Analysts highlighted a significant divergence between firms that are raising projections and those presenting weaker outlooks, exacerbating volatility across the sector.
Citigroup remarked that stretched valuations necessitate sustained earnings momentum and affirmative guidance to uphold current market levels.
Jobs Data Amplifies Economic Anxieties
Recent revelations indicate a concerning surge in layoffs. October witnessed job cuts exceeding 153,000—nearly threefold the figures from September, and 175% higher than last year, rendering it the most challenging October in two decades.
Analysts suggest that these statistics, combined with a government closure now extending into its second month, depict a precarious landscape for the US economy.
Market participants remain hopeful that, upon government reopening, consumer resilience during the holiday season may foster a stabilization of sentiment in the latter part of the year.
Federal Reserve Outlook and Sector Trends
Declining Treasury yields signal increasing expectations for a Federal Reserve interest rate reduction in December. The CME FedWatch Tool now indicates a 68.9% probability, rising from 62% the previous day. Analysts predict further policy support should labor data continue to weaken.
Consumer discretionary sectors led a downturn across six of the eleven S&P sectors, with Nvidia falling above 2% and Tesla declining by 3% ahead of a pivotal shareholder vote regarding Elon Musk’s $US1 trillion remuneration package.
Australian Market Anticipates Lower Opening
SPI futures forecast a 0.16% decrease to 8831. Macquarie is set to unveil its full-year results, while quarterly updates are expected from News Corp, REA Group, and Block. Annual meetings for Nine Entertainment, Amcor, and Qantas are also on the agenda.
Source link: Finnewsnetwork.com.au.
