Introduction
On Thursday morning, Wall Street’s three major indices fell after the release of positive U.S. employment figures that eased bets on a Federal Reserve interest rate cut cycle.
Market Performance
Dow Jones Industrial Average: The benchmark average, consisting of 30 large-cap stocks, dropped by 0.16% to 46,048.02 points.
S&P 500: The index of the 500 largest U.S. companies fell by 0.42% to 6,609.95 points.
Nasdaq Composite: The technology-heavy index declined by 0.41% to 22,404.73.
Jobless Claims
Initial jobless claims stood at 218,000 last week, according to the U.S. Department of Labor’s report on Thursday. This figure was below analysts’ expectations of 235,000 and also lower than the previous week’s claims.
“The real question is: now that jobless claims are less bad than anticipated, does this mean the Fed might hold rates in October and December, possibly waiting until December?” said Sam Stovall, strategist at CFRA Research.
Anticipation of Fed Meeting
Market participants await the release of personal consumption expenditure (PCE) price index data. Meanwhile, futures indicate an 83.4% probability that the Fed will adjust interest rates by 25 basis points in the upcoming meeting. The likelihood was at 92% the previous day.
Stock Movements
Intel: Shares of Intel surged by 5.38% after news emerged that the company had approached Apple to become an investor.
Nvidia: Nvidia’s stock also rose by 0.52% following its announcement of an investment in another company earlier this month.
Economic Data
The third estimate for U.S. GDP growth in the second quarter came in at 3.8% annualized, surpassing expectations of 3.3%. Additionally, orders for durable goods increased by 2.9% in August.
Key Questions and Answers
- Q: Why did Wall Street indices fall? A: The indices dropped following the release of positive U.S. employment figures that eased bets on a Federal Reserve interest rate cut cycle.
- Q: What were the jobless claims figures? A: Initial jobless claims stood at 218,000 last week, below analysts’ expectations of 235,000 and lower than the previous week’s claims.
- Q: What is the likelihood of a Fed rate adjustment? A: Futures indicate an 83.4% probability that the Fed will adjust interest rates by 25 basis points in the upcoming meeting.
- Q: How did specific stocks perform? A: Intel shares surged by 5.38% after news of their approach to Apple for investment, while Nvidia’s stock rose by 0.52% following an earlier announcement of investment in another company.
- Q: What were the recent economic data releases? A: The third estimate for U.S. GDP growth in the second quarter came in at 3.8% annualized, surpassing expectations of 3.3%. Durable goods orders increased by 2.9% in August.
