Stock market today: Indexes tank after weak jobs report sparks panic

• US stocks plunged Friday after a weak July jobs report sparked investor panic.
• The Nasdaq closed in correction territory, and the VIX soared as much as 60% to hit its highest since March 2023.
• Odds of a 50-basis point rate cut at the Fed's September FOMC meeting more than tripled to 72%.

US stocks plunged on Friday, with the S&P 500 extending its two-day sell-off to more than 3%, as a weak July jobs report sparked panic among investors.

The tech-heavy Nasdaq Composite officially entered correction territory, closing more than 10% below its July 10 peak. Meanwhile, the CBOE Volatility Index, better known as the VIX, soared as much as 60% to 29.66, its highest level since March 2023.

Bond yields plunged, with the 10-year US Treasury yield falling 18 basis points to 3.79%, its lowest level all year.

After a sharp sell-off on Thursday, equity futures started Friday morning lower after disappointing earnings reports from Amazon and Intel after the closing bell.

The damage was exacerbated after the July jobs report showed an unexpected increase in the unemployment rate and payroll figures badly missed estimates. The increase in joblessness triggered a widely followed recession indicator called the Sahm rule.

Odds of a 50-basis point interest rate cut at the Federal Reserve's September FOMC meeting soared to 72% on Friday, more than tripling from its 22% reading on Thursday, according to the CME Fed Watch Tool.

In a matter of days, the consensus expectation on Wall Street has shifted from a 25-basis-point reduction in September to a 50-point cut. There is also increased pressure for the Fed to accelerate its pace through year-end and beyond.

"Market moves on Thursday pointed to investor concerns that the US economy is cooling too quickly and may require further support from the Fed," Solita Marcelli, the Americas CIO at UBS Global Wealth Management, said in a note.

"That is a sign of fear and panic. That is something we would want to see near the lows," Fundstrat's Tom Lee said of the VIX in a note to clients on Friday.

Other signs of panic among investors include sentiment indicators like CNN's Fear & Greed Index, which entered "Fear" mode this week after it fell 18 points to 27.

Here's where US indexes stood at the 4:00 p.m. closing bell on Friday:

• S&P 500: 5,346.56, down 1.8%
• Dow Jones Industrial Average: 39,737.26, down 1.5% (611 points)
• Nasdaq composite: 16,776.16, down 2.4%

Here's what else happened today:

• Shares of Intel plunged 30%, its biggest daily loss since 1982, after the company announced massive layoffs and cut its dividend.
• The Federal Reserve will have to cut interest rates more than expected this year, according to ING Economics.
• Homebuyers are flocking to assumable mortgages that offer lower interest rates, but they're hard to get.
• Japanese stocks had their worst day since 2020 after the Nikkei stock index plunged 5.8%.
• The rising trend of reshoring and nearshoring will benefit these ten stocks.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil fell 3.17% to $73.89 a barrel. Brent crude, the international benchmark, declined 2.99% to $77.14 a barrel.
• Gold was lower by 0.22% to $2,475.30 per ounce.
• The 10-year Treasury yield dropped 18 basis points to 3.79%.
• Bitcoin dropped 4.30% to $62,490.