New York, NY – Stocks experienced a shift in direction during afternoon trading on Friday, losing momentum after a strong rally led by prominent tech companies. The February jobs report also played a role in the market movement, showing an increase in the unemployment rate. This data boosted investor confidence in a potential rate cut by the Federal Reserve following its June meeting.
The S&P 500 hovered near the flatline after achieving another record close on Thursday, while the Dow Jones Industrial Average saw a modest increase of nearly 0.3%. On the other hand, the Nasdaq Composite, known for its tech-heavy focus, saw a 0.3% decline after a significant gain the previous day.
The non-farm payrolls report released on Friday indicated that the US economy added 275,000 jobs in February, surpassing expectations on Wall Street. However, the unemployment rate also saw a slight uptick to 3.9%, marking its first increase in four months. Futures on the major indexes were trading in the red prior to the release of the jobs data.
Federal Reserve Chair Jerome Powell’s recent comments to lawmakers, signaling that the central bank is approaching a point of confidence regarding inflation, have further influenced market sentiment. In Europe, policymakers from the European Central Bank have indicated support for a rate cut amid faster-than-expected declines in inflation. Meanwhile, the Bank of Japan is considering moving away from negative interest rates.
In corporate news, shares of Costco dropped by 7% after the company reported a quarterly sales miss despite exceeding earnings expectations. Conversely, Broadcom saw its stock decline by over 6% despite beating revenue estimates and forecasting $10 billion in sales related to AI-linked chips.
Commodities also saw movement, with gold futures continuing to climb as spot gold eyed its largest weekly increase in five months, driven by optimism surrounding a potential mid-year rate cut by the Fed.
Overall, the market outlook remains uncertain as investors digest the latest economic data and navigate changing global monetary policies. The week’s developments have brought both opportunities and challenges for investors across various sectors, underscoring the importance of staying informed and adaptable in today’s dynamic market environment.