Wall Street stocks failed to stabilize on Wednesday and major indexes closed mixed after sharp losses seen in the previous session, which were fueled by concerns about the possibility of an economic slowdown.
In this context the reference Dow Jones Industrials rose 0.1% to 40,974.97 points; S&P500 fell 0.2% to 5,520.07 points and the Nasdaq The Composite Index fell 0.3% to 17,084.30 points.
The New York Stock Exchange suffered a sharp sell-off on Tuesday, following the Disappointing manufacturing activity data which fueled concerns about the financial outlook.
Volatility in the market is palpable as investors await the crucial US employment report to be released on Fridaywhich is expected to provide insight into the health of the U.S. economy and possibly influence the pace of interest rate adjustments by the Federal Reserve.
Ahead of the jobs report, the Survey of Job Offers and Labour Turnoverwhich economists consider a gauge of demand, is expected to show that the number of available jobs fell in July to about 8.09 million. In June, the figure fell slightly to 8.184 million.
The Voice of the Fed
Federal Reserve Bank of Atlanta President Raphael Bostic said: The central bank’s two mandates — stable prices and maximum employment — are in balance for the first time since 2021although he added that he is “not quite ready” to declare victory over inflation.
“Although they have decreased significantly, Risks to meeting our price stability mandate persist“Bostic said in a paper released Wednesday by the Atlanta Fed. “We must remain vigilant to ensure that these risks continue to diminish.”
“History shows us that relaxing monetary policy prematurely is a dangerous tactic that could rekindle inflation and entrench it in the economy for many months or even years,” he said.
This year, Bostic is a voting member of the Federal Open Market Committee. His comments make it unclear whether he would support a quarter-point rate cut when officials meet again next month. September 17 and 18.
The president of the Atlanta Fed indicated that there is also some Risk to the labor market if the central bank waits until inflation returns to 2% before reducing the policy restriction.
Looking at labor market data and anecdotal information, Bostic said he sees a Labor market “easing, but still broadly stable”.
Less pressure to compete for workers has also cooled wage increasesremoving some of the drive among firms, especially in the service sector, to raise prices to cover labor costs. More broadly, he said, pricing power among firms appears to be disappearing.
“Don’t worry, I don’t sense an impending crisis or panic among business contacts.“Bostic said. “However, the data and grassroots opinion paint a picture of an economy and labor market that are losing momentum.”
The head of the Atlanta Fed has repeatedly warned of the risk of reigniting inflation if the central bank acts too soon in cutting rates. Last week, Bostic noted that The cooling of price pressures had led it to advance its timetable for lowering rates.but inflation was “still far” from the Fed’s 2% target.
Technology seeks a compass
After the market reopened after the weekend holiday, Tech stocks faced further significant pressure in a broader risk-averse marketWedbush analysts, however, have not been affected by the latest sell-off tsunami and stress that their “tech bullish thesis remains intact.”
“While we acknowledge the uneven macroeconomic and labor data and the continued anxiety about the US presidential elections in November, We see this sell-off in tech stocks as a buying opportunity “for our biggest winners in this AI revolution,” Wedbush analysts said in a Tuesday note.
“The stage is set for tech stocks to rally through year-end and 2025, in our view“the analysts stressed, as they expect the Federal Reserve to begin cutting rates, the economy to experience a soft landing and AI spending to drive a long-term generational shift in technology investment.
Corporate results continue
The Zscaler shares fell 19% despite suggestions that his outlook might be conservativeAsana fell 6% after reporting a difficult quarter and announcing the change of its CFO and Pagerduty also saw its shares fall by 1.3% after lowering its revenue forecast.
On the contrary, the actions of Clover Health Investments Corp gained 15.6% after its Counterpart Unit secured a contract from the Iowa Clinic. In the same vein, the Gitlab shares up 19% following solid results and an improved forecast that coincides with that of analysts.
Source: Ambito
