Once again, once-soaring technology stocks took the brunt of Wall Street's rout on Friday, following the release of a much-awaited update on the U.S. job market that was so weak as to fuel concerns about the health of the economy.
In the final week of its worst week since March 2023, the S&P 500 fell 1.7 per cent. Amidst persistent worries that their costs have skyrocketed due to the artificial intelligence boom, Broadcom, Nvidia, and other tech companies drove the market lower.
The Nasdaq composite to decline by a record-breaking 2.6 per cent. The tech heavy index Nasdaq Composite fuled by the tech and artificial intelligence boom was brought down by the same magificent seven, which took the index to its new high level every week.
The Nasdaq Composite opened at 17,137.62 levels on the US stock exchange. After opening bell, it started to plummet down and went to touch the day low of 16,668.57 points on the bourse. The index was trading around 16,690.83 points at the time of the closing bell.
The Dow Jones Industrial Average erased a morning gain of 250 points, falling 410 points, amounting to 1 per cent.
Market reaction on jobs data
Concerns were raised by Friday's data regarding the extent to which the Federal Reserve will lower its benchmark interest rate during its meeting later this month. After maintaining the federal funds rate at a two-decade high for more than a year, the Fed is about to shift its emphasis to safeguarding the job market and averting a recession.
Interest rate reductions can increase the value of investments, but Wall Street is concerned that the Fed might be acting too late. The benefits of lower rates would be diminished if a recession were to take place, undermining corporate profits.
On Friday, other chip makers also experienced losses, with Nvidia seeing a 4.1 per cent decline. Following a sharp increase in revenue during the AI craze earlier this year, Nvidia's stock has been shaky since mid-July as investors wonder if they overpriced the company.
Nvidia's stock, which dropped 13.9 per cent during the course of the week despite being one of the most significant on Wall Street due to its enormous size.
