US stocks experience a sharp decline driven by a sell-off in the technology sector, with the Nasdaq plummeting over 1% due to a significant drop in Nvidia's stock price. Mixed jobs data indicates potential interest rate cuts but also points to a cooling economy, raising concerns of an economic slowdown.
US Stocks Plummet as Technology Sell-Off Drives Market Downturn
( Credit to: Markets )
US stocks experienced a sharp decline on Friday, driven by a sell-off in the technology sector. The Nasdaq, which had reached record highs earlier in the day, plummeted more than 1% due to a significant drop in Nvidia's stock price.
The market downturn was influenced by the release of mixed jobs data. While the data indicated positive trends for potential interest rate cuts, it also pointed to a cooling economy. In February, the US added 275,000 new jobs, surpassing expectations of 200,000. However, downward revisions to previous months' figures resulted in an increase in the unemployment rate to 3.9%, the highest level in two years. Additionally, wage growth slowed down during the same period.
These factors suggest that rate cuts may be warranted, but they also acknowledge the possibility of an economic slowdown following a period of remarkable strength throughout the previous year. Market participants are now closely watching for the release of the consumer price index report scheduled for next Tuesday, as January's inflation rate exceeded expectations at 3.1%.
Concerns of Economic Slowdown Amidst Positive Jobs Data
Mixed jobs data released on Friday indicated positive trends for potential interest rate cuts, but also pointed to a cooling economy. In February, the US added 275,000 new jobs, surpassing expectations. However, downward revisions to previous months' figures resulted in an increase in the unemployment rate to 3.9%, the highest level in two years. Wage growth also slowed down during the same period.
These factors suggest that rate cuts may be warranted, but they also acknowledge the possibility of an economic slowdown following a period of remarkable strength throughout the previous year. Market participants are now closely watching for the release of the consumer price index report scheduled for next Tuesday, as January's inflation rate exceeded expectations at 3.1%.
Market Reaction: Sharp Decline in US Stocks
US stocks experienced a sharp decline on Friday, driven by a sell-off in the technology sector. The Nasdaq, which had reached record highs earlier in the day, plummeted more than 1% due to a significant drop in Nvidia's stock price.
The market downturn was influenced by the release of mixed jobs data. While the data indicated positive trends for potential interest rate cuts, it also pointed to a cooling economy. In February, the US added 275,000 new jobs, surpassing expectations of 200,000. However, downward revisions to previous months' figures resulted in an increase in the unemployment rate to 3.9%, the highest level in two years. Additionally, wage growth slowed down during the same period.
These factors suggest that rate cuts may be warranted, but they also acknowledge the possibility of an economic slowdown following a period of remarkable strength throughout the previous year. Market participants are now closely watching for the release of the consumer price index report scheduled for next Tuesday, as January's inflation rate exceeded expectations at 3.1%.
Impact of Mixed Jobs Data on US Stocks
The release of mixed jobs data had a significant impact on US stocks, leading to a sharp decline on Friday. The Nasdaq, which had reached record highs earlier in the day, plummeted more than 1% due to a significant drop in Nvidia's stock price.
The mixed jobs data indicated positive trends for potential interest rate cuts, with the US adding 275,000 new jobs in February, surpassing expectations. However, downward revisions to previous months' figures resulted in an increase in the unemployment rate to 3.9%, the highest level in two years. Wage growth also slowed down during the same period.
These mixed signals suggest that rate cuts may be warranted, but they also acknowledge the possibility of an economic slowdown following a period of remarkable strength throughout the previous year. Market participants are now closely watching for the release of the consumer price index report scheduled for next Tuesday, as January's inflation rate exceeded expectations at 3.1%.
Oil Prices Decline, Gold Rises, and Bitcoin Sees an Increase
In the commodities market, oil prices experienced a decline, with West Texas Intermediate falling 1.29% to $77.91 per barrel, and Brent crude, the international benchmark, dropping 1.23% to $81.94 per barrel. On the other hand, gold rose 0.82% to $2,183 per ounce. The 10-year Treasury yield slipped one basis point to 4.077%. Bitcoin also saw an increase, rising by 2.34% to $69,327.75.
Market Outlook: Portfolio Manager Warns of Potential Panic
A portfolio manager has warned that the stock market is at risk of panic, which could trigger a steep crash. Despite this concern, Americans saw their net worth reach record levels last year, largely driven by stock market performance.
Tech-Heavy Stock Market Still Has Room to Grow
Despite the recent market downturn, two signals suggest that the breadth of the stock market remains healthy, despite the dominance of mega-cap tech companies. Furthermore, Goldman Sachs believes that the current tech-heavy stock market still has room to grow based on historical analysis spanning a century.
