Wall Street falls more than 1% S&P 500 index at June lows
North American stock markets fell more than 1% on the day that new labor market data supported the hypothesis of higher interest rates for a longer period.
North American stock markets closed with losses, under pressure from strong labor market data – giving strength to the US Federal Reserve’s thesis that interest rates must remain at high levels for longer.
The number of new unemployment claims fell last week to the lowest value since January (201,000), after a decline of 20,000 new claims in that period alone.
The S&P 500 index, a benchmark for the region, fell 1.64% to… 4,330 point, at the lowest level since mid-June. The Dow Jones Industrial Average fell by 1.08% to… 34,070.42 Point and the Nasdaq technology index fell by 1.82% to 13,223.98 points.
Among the major moves, Amazon and Nvidia led declines among the tech giants, with losses of 4.41% to $129.32 and 2.89% to $410.17, respectively.
Cisco Systems shares fell 3.89% to $53.34 on the day it was announced that it had reached an agreement to buy the software company Splunk for $28 billion, while Broadcom shares fell 2.67% to $808.36 after reports indicated that Google, which is owned by Alphabet, would consider stopping… Buying AI chips from the company starting in 2027. Broadcom recovered from larger losses after Google tried to put the rumors to rest, saying that “Broadcom has been an excellent partner and does not expect any change in commitment.”
Chris Gaffney, head of global markets at Everbank, told Bloomberg that the market is only now understanding the Fed’s commitment to lowering inflation. He added: “The central bank is determined to reduce inflation – and I think part of that commitment is to keep interest rates high for a longer period – and the markets are finally understanding that.”
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