US economic growth slowed sharply in July amid historically high interest rates. The market is reacting.
Wall Street falls sharply on Friday after a jobs report The July forecast was worse than expected. The data reinforced Thursday’s forecast, which underscored growing concerns on the weakening of the US economywhile technology stocks suffer after disappointing earnings reports.
The Dow Jones Industrial Average fell 1.9%, the S&P 500 lost 1.9% and the Nasdaq 100 sank 2.2%. The Russell 2000 fell 3.6%. It is worth recalling that the major indexes plunged on Thursday amid a sell-off in chip stocks, while fears grew about an economy hit by the weight of high interest rates.
Wall Street digests employment data
Data released Friday by the Bureau of Labor Statistics showed that U.S. employers added far fewer jobs than expected in July, while the unemployment rate rose to 4.3% from 4.1% in June. Coupled with Thursday’s economic reports showing weak manufacturing activity and lower construction investment, Evidence is mounting that the economy is seriously slowing under the weight of the Federal Reserve’s high interest rate policy.
The Fed has kept its influential interest rate at its highest level since 2001 in an effort to control inflation. Earlier this week, after the central bank decided to keep interest rates unchanged, the president Jerome Powell acknowledged progress on inflation and said the Fed could be in a position to cut interest rates as early as September.
Amazon (AMZN) was also down about 10% in premarket trading after the e-commerce giant reported weaker-than-expected quarterly revenue and issue soft guidance for the current quarter. Magnificent Seven member Apple (AAPL) drops 1% despite beating earnings expectations.
Source: Ambito
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