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Stocks opened higher on Friday as investors pondered February’s jobs report. However, major indexes fell in the morning and remained there until the close as several heavyweight stocks in the tech sector sold off.
Prior to the opening, Bureau of Labor Statistics The US added 275,000 new people. work It exceeded economists’ expectations of 200,000 jobs in February. Still, employment growth rates for December and January were revised downward, with the unemployment rate rising from 3.7% to 3.9%.
The February jobs report suggested strong employment, but “also showed rising unemployment, slowing wage growth, and weak labor force participation.” Jose Torres, Senior Economist at Interactive Brokers. “The bulls were focused on the weaker aspects of the report, buying up speculative assets and stocks. bond” Torres added, but the bears made “daylight intercepts.”
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Indeed, the excitement over the downwardly revised numbers and rising unemployment quickly dissipated along with growth in some large- and mega-cap stocks. tech stocks The stock sold off sharply, dragging down the major indexes.
Nvidia reversal wipes out $127 billion in market value
Most notable was the Nvidia (NVDA) rose more than 5% in early trading, but ended the day down 5.6%, reducing its market cap by $127 billion. Popular chip manufacturers are: best stocks Even accounting for today’s decline, sales are up nearly 77% this year.
For additional context, consider the fact that this year-to-date gain increased NVDA’s market value by $967 billion, or $95 billion. more than Berkshire Hathaway (BRK.B) Overall Market capitalization.
Given NVDA’s incredible price chart rise, today’s drop was probably the result of profit-taking. However, weakness was seen across the industry.
fellow semiconductor stocks broadcom (AVGO, -7.0%) and marvel technology For example, (MRVL, -11.4%) both fell significantly after earnings. Broadcom beat first-quarter sales and bottom line results, but full-year sales fell short of analysts’ expectations. Meanwhile, Marvell reported fourth-quarter inline results, but the outlook for the first quarter was weaker than expected.
SOTU addresses do little to move the market
Also making headlines Friday were remarks from President Joe Biden. state of the union address. The president covered a variety of topics Thursday night, including some new material. Home Buyer Tax Credit and drug price. He also proposed raising interest rates for large corporations and billionaires.
But given that anything proposed in the State of the Union is likely to have a long and difficult road to fruition, “the potential for higher taxes on the wealthy…doesn’t upset the apple cart for the market.” he says. ryan detrickChief Market Strategist at Carson Group.
In fact, today’s volatile trading was driven by the decline in jobs data and tech stocks. Regarding the index, Nasdaq Compositerose 1% to its intraday high, but ended the day 1.2% lower at 16,085.of S&P500 It closed 0.7% lower at 5,123. Dow Jones Industrial Average The number of cases decreased by 0.2% to 38,722 cases.
February CPI on deck
Looking ahead, next week’s February Consumer Price Index (CPI) will probably be the most anticipated event. economic calendar. The report, to be released Tuesday morning, “should allay concerns that inflation is accelerating again after the January data,” they wrote. Stephen Juneausaid economists at BofA Securities in a note to clients.
Juneau expects the headline CPI to rise 0.4% month-on-month, faster than the 0.3% rise in January, due to higher gas prices. However, core CPI, which excludes volatile food and energy prices, is expected to rise 0.3% from January to February, down from the previous month’s 0.4% rise.
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