Wall Street flat after weak labor market data, dovish Fed comments
By Chibuike Oguh
NEW YORK (Reuters) -U.S. stocks were mostly flat in choppy trading on Wednesday following labor market data and comments from a Federal Reserve official that bolster the case for an interest rate cut.
Labor Department data showed that U.S. job openings fell to a 3-1/2-year low in July, indicating continued easing of labor market tightness that could strengthen the Fed's hand to begin cutting rates at its next meeting later this month.
The benchmark S&P 500 , Nasdaq and Dow indexes were flat in choppy trading, with utilities stocks leading the gainers while energy and healthcare equities were the main drag. Nine out of 11 S&P 500 sectors were trading down.
"For me, even though the index is flat or down a couple of basis points, actually the market is up," said Eric Beyrich, co-chief investment officer at Sound Income Strategies. "The data always gets messed up, if you will, by the large cap tech companies which drive everything."
Shares of Nvidia (NASDAQ:NVDA ), which suffered a massive $279 billion drop in market value on Tuesday, were up 0.2%. The U.S. Department of Justice sent a subpoena to the AI chip firm as it deepens its probe into the company's antitrust practices, according to a report.
Other megacap growth stocks including Apple (NASDAQ:AAPL ) slipped 1% and Amazon.com (NASDAQ:AMZN ) fell 1.8%. Tesla (NASDAQ:TSLA ) was up nearly 5%.
Raphael Bostic, Atlanta Fed president, said on Wednesday the central bank must not keep interest rates too high much longer or it risks causing too much harm to employment. He added that waiting until inflation falls back to the Fed's 2% goal before cutting rates "would risk labor market disruptions that could inflict unnecessary pain and suffering."
In Tuesday's session, all three Wall Street indexes slumped to their biggest one-day loss since early August as investors dumped technology-related stocks in a dour start to September - which is historically the worst month for equities.
"Utility stocks are up today because of weak data in jobs that just bolsters the case that when the Fed meets in almost a few weeks they are going to cut rates by at least 25 basis points," Beyrich added.
The Dow Jones Industrial Average rose 3.38 points, or 0.00%, to 40,936.13, the S&P 500 lost 5.11 points, or 0.09%, to 5,523.82 and the Nasdaq Composite lost 1.55 points, or 0.00%, to 17,135.93.
The Philadelphia SE Semiconductor index rebounded from its biggest one-day drop since the COVID-19 pandemic in the previous session and was up 0.72%.
Advanced Micro Devices (NASDAQ:AMD ) rose 3.5% after it named former Nvidia executive Keith Strier as its senior vice president of global AI markets.
Zscaler (NASDAQ:ZS ) forecast fiscal 2025 revenue and profit below estimates, sending its shares down nearly 18%. Dollar Tree (NASDAQ:DLTR ) slumped 24% after the discount store operator trimmed its annual sales and profit forecasts.
Source: Investing.com
