The release of data on the US labour market, which slowed more than expected in July, and the unemployment rate, which rose to its highest level in three years, rekindled strong fears among investors.
The so-called “fear index” or VIX soars almost 40% this Friday to almost two-year highs, amid a general slump on Wall Street following the publication of data on the US labor market, which slowed more than expected in July, while the unemployment rate rose to the highest level in three years.
The VIX tends to rise when investors are worried or fearful. that the market may experience sharp movements or significant declines. In general, high implied volatility, reflected in the VIX, is associated with an increase in investors’ perception of risk.
On Friday, the index rose 39.7% to 25.97 points, after hitting a high of 29.60, which represents the highest level since November 2022.
wall street markets
Reuters
Wall Street: widespread declines in major indices
Wall Street’s three main indexes plunged, losing 2.2% overall, following the release of the employment figures. The Nasdaq fell 3%, weighed down by the slump of Intel (-27%), which had previously announced mass layoffs.
According to official data from this Friday, The US unemployment rate stood at 4.3% in July, compared with 4.1% in June, and only 114,000 jobs were created, compared with 179,000 in the previous month. The deterioration in the labor market was much greater than expected by analysts.
As for the giant Intel, lagging behind its competitors in the sector of chips adapted to generative artificial intelligence (AI), announced Thursday the dismissal of up to 15% of its workforce to cut its costs by $10 billion. The American group had around 125,000 employees at the end of 2023, so around 18,000 people are expected to lose their jobs.
Source: Ambito
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