Wall Street Futures Slide After Volatile Week, Nasdaq Enters Correction Territory
U.S. stock futures tumbled Sunday night, extending the recent sell-off following a turbulent week for Wall Street. The Nasdaq Composite entered correction territory after falling more than 10% from its record high set last month, sparking concerns about a potential economic slowdown.
Key Takeaways:
- Dow Jones Industrial Average futures declined by 221 points, or 0.6%.
- S&P 500 futures dropped by 0.9%.
- Nasdaq-100 futures dipped by 1.2%.
- The Nasdaq Composite entered correction territory, falling more than 10% from its recent high.
- Treasury yields tumbled as investors sought safer assets.
- A disappointing July jobs report fueled fears that the Federal Reserve might have made a mistake by keeping interest rates unchanged last week.
A Week of Losses and Concerns
The recent pullback in stocks was fueled by a combination of factors, including:
- Disappointing Economic Data: The July jobs report showed a much lower-than-expected increase in jobs, raising concerns about the strength of the economy. The unemployment rate also rose to 4.3%, indicating a potential slowdown in job growth.
- Federal Reserve Uncertainty: Investors are unsure about the Federal Reserve’s future plans regarding interest rates. While the Fed opted to keep rates unchanged in its last meeting, many believe that the weak jobs data could pressure the Fed to cut rates sooner than expected.
- Market Volatility: The S&P 500 and Dow Jones Industrial Average both posted their third consecutive losing week. This volatility reflects investor uncertainty and anxieties about the broader economic outlook.
The Impact on Major Averages
The S&P 500 is now 5.7% below its all-time high, while the Dow has declined by 3.9%.
Keith Lerner, co-chief investment officer at Truist Wealth, believes that the market is in a corrective period but that the overall bull market trend remains intact.
“I think we’re in that corrective period, but we still think the bull market trend is intact," Lerner said. "It’s just going to take a little bit to get through this kind of choppier period."
Apple in Focus
Apple will be closely watched this week, particularly after Warren Buffett’s Berkshire Hathaway sold nearly half its stake in the tech giant. Investors will be looking for any signals that the sell-off indicates a broader trend in the tech sector or a specific concern about Apple’s future prospects.
Economic Data and the Fed’s Next Move
Investors will be closely monitoring economic data this week, including the July ISM Services PMI, which is expected to show a rise to 50.9, suggesting an improvement in the services sector.
Mary Daly, President of the Federal Reserve Bank of San Francisco, is scheduled to speak at the Hawaii Executive Collaborative after the market closes on Monday. Her speech will be scrutinized for any hints about the Fed’s future plans regarding interest rates.
The market’s reaction to the economic data and Fed commentary this week will be crucial in determining the direction of the market in the coming weeks and months.
