U.S. stocks are having the worst session since 2022 after a string of weak economic reports jolted investor fears that a recession may be brewing.
All three of the major benchmarks are down well over 2% with the Dow Jones Industrial Average, off nearly 1,000 points midday before trimming some losses. All 11 of the largest S&P sectors were also in the red.
The tech-heavy Nasdaq Composite is nearing a correction, down 10% from its peak reached in July of 18,647.
A paltry employment report which saw just 114,000 jobs created last month and an uptick in unemployment to 4.3% added fuel to the fire on Friday. Growth has been on the decline since May.
This after weekly jobless claims jumped more than expected to an 11-month high on Thursday, which was followed by Intel’s announcement that it plans to cut 15% of its workforce and pause its dividend.
Consumer discretionary stocks were down over 4% with declines in Walmart and Target as well as Amazon, which told investors that shoppers were turning more cautious in its latest earnings report.
Additionally, the ISM Manufacturing report fell below 50, a sign of contracting, and the sector posted another month of job cuts in July.
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Federal Reserve Chairman Jerome Powell, at this week’s meeting, signaled that a rate cut is likely in September with about 80% of market participants expecting a larger easing, which would bring rates from 550-525 to 475-500, according to the CME’s FedWatch Tool, which tracks future rate moves.
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Gold, a traditional flight to safety, was also under pressure. However, it is hovering near its record $2,470 an ounce.
In cryptocurrencies, Bitcoin slid to the $63,000 level and is off over 13% from its all-time high of $73,462.59 reached in March. The yellow metal has gained over 17% this year.
