PARIS (Reuters) – The New York Stock Exchange fell at the open on Friday as investors worried that weakening U.S. labor markets could be a precursor to an economic slowdown.

In early trading, the Dow Jones index lost 406.72 points, or 1.01%, to 39,941.25 points, and the broader Standard & Poor’s 500 fell 1.52% to 5,363.64 points. The Nasdaq Composite lost 2.51%, or 430.85 points, to 16,763.297.

Markets are concerned about the slowdown in the jobs market, as there are successive elements raising fears of a slowdown in the American economy.

Friday’s monthly jobs report, which surprised sharply to the downside, rekindled those fears.

“Friday’s job creation figures were key for markets (…). A stronger job creation could have indicated resilient growth, thus helping to stabilise markets,” summarises Florian Ielpo, head of macro research at Lombard Odier IM.

Traders now see a 50 basis point rate cut by the Federal Reserve in September as likely, but monetary easing risks coming too late.

“Given this real economic slowdown, it is difficult to say how many cuts will be necessary to stabilize the deterioration in earnings prospects and stock valuations,” concludes Florian Ielpo.

Poor results from Intel and Amazon added to the pressure on the indices, with technology stocks showing declines.

In terms of values, Amazon.com lost 9.8% after saying Thursday that it expected its revenue for the current quarter to be significantly lower than consensus.

Intel announced Thursday that it would suspend its dividend starting in the fourth quarter, and shares plummeted 25.7%.

Apple reported a return to sales growth in the third quarter on Thursday, up 0.2%.

(Written by Corentin Chappron, edited by Sophie Louet)

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