US stock markets closed mixed on Thursday, with the Dow Jones Industrial Average falling 0.54% to 40,755.75 points and the S&P 500 declining 0.30% to 5,503.41 points, while the Nasdaq managed a slight gain of 0.25% to 17,127.661 points. Investors are cautiously awaiting Friday’s crucial nonfarm payroll data, which could significantly influence Federal Reserve interest rate decisions.Recent economic reports have painted a mixed picture of the US economy. The Institute for Supply Management’s Services Purchasing Managers Index (PMI) edged up to 51.5 in August from 51.4 in July, indicating continued growth in the services sector. However, the ADP report showed that private sector job growth has slowed considerably, with only 99,000 new jobs created in August, the lowest figure since January 2021. This has raised concerns about a potential economic slowdown, but also fueled speculation about possible interest rate cuts by the Fed.The market is currently pricing in over 100 basis points of Fed easing this year, implying a potential significant reduction in interest rates. However, analysts warn that the upcoming jobs report could shift market expectations dramatically. Steve Sosnick at Interactive Brokers cautioned, ‘The danger in really ‘bad news’ is that even if the Fed is prepared to react aggressively, it might be too late to stave off real economic weakness’.Despite the overall cautious sentiment, tech stocks showed resilience. Companies like Tesla and Amazon saw significant gains, with Tesla rising 4.90% after announcing plans to launch its Full Self-Driving (FSD) software in China and Europe in 2025, pending regulatory approval. The 10-year US Treasury yield fell to 3.72%, down from 3.75% the previous day, reflecting the market’s nervousness and expectations of potential rate cuts.
Key points
- US stock markets closed mixed on Thursday, with the Dow Jones and S&P 500 falling while the Nasdaq slightly gained.
- The ADP report showed only 99,000 new jobs created in August, the lowest since January 2021, raising concerns about economic slowdown.
- Investors are cautiously awaiting Friday’s nonfarm payroll data, which could influence Federal Reserve interest rate decisions.
- The market is pricing in over 100 basis points of Fed easing this year, implying potential significant interest rate cuts.
Contradictions👾While some reports indicate economic slowdown, others such as the ISM Services PMI suggest continued growth in the services sector.
