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Stock Market Today: Dow Stumbles as Strong Jobs Data Strike Down 'Fed Pivot' Hopes

Stock Markets Oct 07, 2022 04:11PM ET
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By Yasin Ebrahim

Investing.com -- The Dow slumped Friday, as a stronger-than-expected monthly jobs report quelled hopes of a Fed pivot, and shifted investor focus to the prospect of another jumbo-sized rate hike next month.

The Dow Jones Industrial Average fell 2.1%, or 630 points, the Nasdaq slipped 3.8%, and the S&P 500 fell 2.8%.

The U.S. economy created 263,000 jobs last month, above the 250,000 economists had expected, while the unemployment rate unexpectedly dropped to 3.5%  as fewer than expected people entered the labor market.

Wage growth of 0.3% was in line with forecasts, but slowed to 5% from 5.2% in 12 months through September.

While this is a “welcome development for the Fed,” according to Jefferies, it won’t provide a ”justification for slowing from the recent pace of 75 bp rate hikes, so we expect another one at the November meeting.”

The revival of hawkish Fed bets pushed Treasury yields higher, pushing growth areas of the market including tech and consumer discretionary stocks into the red.

Microsoft (NASDAQ:MSFT) fell more than 5% followed by Meta (NASDAQ:META), Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) as a rising rate environment tends to sour sentiment on higher-valued stocks with a longer payoff horizon. 

Tech was also pushed deeper in the red by a slump in chip stocks following a profit warning from chipmaker AMD.

Advanced Micro Devices (NASDAQ:AMD) plunged nearly 14% after announcing preliminary results for the third quarter that missed Wall Street estimates.

The miss on revenue guidance was driven by a “weaker-than-expected PC market & the resulting inventory correction in the PC supply chain,” Deutsche Bank said in a note after cutting its price target on the stock to $90 from $95.

NVIDIA (NASDAQ:NVDA) slipped 8%, Taiwan Semiconductor Manufacturing (NYSE:TSM) fell 6% and Qualcomm (NASDAQ:QCOM) was down more than 3%.

On the earnings front, Levi Strauss & Co (NYSE:LEVI) fell more than 9% after trimming its full-year guidance as ongoing supply chain troubles and a stronger dollar bite.

The broader market drop comes ahead of fresh inflation data next week that will influence the Fed's thinking on rate hikes. But without a "precipitous drop" in economic growth, or a deep recession, the slowdown in the pace of inflation is going to be "slower than what everybody hopes," Robert Conzo, CEO of The Wealth Alliance told Investing.com's Yasin Ebrahim in an interview on Friday.       

“You're going to have a period of sideways markets as the economy is unlikely to go into a deep recession because people are working and spending,” Conzo said. “That trend isn’t going to change very much, meaning that inflation will be sticky,” he added.

Stock Market Today: Dow Stumbles as Strong Jobs Data Strike Down 'Fed Pivot' Hopes
 

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Comments (14)
Dave Jones
Dave Jones Oct 08, 2022 11:39AM ET
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you realize a pivot is the fed utterly losing credibility right? It's not just a cool trendy word. It would actually be an utter disaster.
Chad Richer Than You
Chad Richer Than You Oct 08, 2022 11:36AM ET
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The blast on the Crimean bridge made my weekend. The Ukrainian Kamikaze goes straight to heaven. Let's see a blast in Moscow metro next.
Todd Gray
Todd Gray Oct 07, 2022 7:44PM ET
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when the media calls it a stumble, it's time to sell. trading 101 is do exactly the opposite of what they say.
Stephen Fa
Stephen Fa Oct 07, 2022 6:25PM ET
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1llegal al1ens stabbing citizens Vegas and looting in hurricane zones... Biden and the Democrats are squarely to blame for rampant crime and eroding confidence in American way of life and liberty.
Bubba Born
Bubba Born Oct 07, 2022 6:25PM ET
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Those are just minor crimes. The real criminals are the banks and the Republicans in Washington that support them.
BUH lucky
BUH lucky Oct 07, 2022 6:25PM ET
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Your grasp of the english language is the crime.
Todd Gray
Todd Gray Oct 07, 2022 6:14PM ET
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a few thousand jobs either way is meaningless. like that will save an imploding world economy.
Stacy Starner
Stacy Starner Oct 07, 2022 5:45PM ET
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Market will always be bad until biden pelosi amd powell get out of office Waste of tax payers money. Shoold ne ashamed of yourself for voting for those lazy pos
Robert Cox
Robert Cox Oct 07, 2022 5:45PM ET
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Calm down, comrade! No one here cares about Putin's opinion.
Stephen Fa
Stephen Fa Oct 07, 2022 5:45PM ET
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Biden and the Democrats are the ones copying Russia's and China's communism. So, you shouldn't be so quick to call comments names.
Buy And Sell
Buy And Sell Oct 07, 2022 5:44PM ET
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Todays data = Huge crash for stocks. Sell all your stocks on Monday or go broke!!!
Casador Del Oso
Casador Del Oso Oct 07, 2022 5:44PM ET
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This is a better strategy, for now, than investing based on hopes.
Mo Lm
Mo Lm Oct 07, 2022 5:32PM ET
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Algos generated headlines
Casador Del Oso
Casador Del Oso Oct 07, 2022 5:16PM ET
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An unamed BofA analyst once said "Hope is not a strategy".
Mo Lm
Mo Lm Oct 07, 2022 5:16PM ET
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Not the same can be said about blatant manipulation
Chad Richer Than You
Chad Richer Than You Oct 07, 2022 5:07PM ET
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As Chad & Co move operations to the nearest bunker
 
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