S&P 500 falls 1% Friday, heads for worst week in a year on tech selling, weak jobs report: Live updates

The S&P 500 fell Friday, and headed for its worst week since March 2023, as investors assessed a weaker-than-expected August jobs report and ditched technology stocks.

The broad index dropped 1.4%, while the Nasdaq Composite shed 2.1%. The Dow Jones Industrial Average fell 290 points, or 0.7%.

Megacap tech stocks fell as investors continued dumping risk assets amid mounting growth fears. Amazon and Alphabet slumped more than 2%, while Microsoft and Meta Platforms lost 1% each. Broadcom shed 10% after forecasting in-line fiscal fourth-quarter revenue. Other semiconductors fell in sympathy, with Nvidia, Advanced Micro Devices and Marvell Technology last down more than 4% each. The iShares Semiconductor ETF declined 4%.

Fresh August jobs data further added to concerns of a slowing labor market. A bout of weak labor data has sparked worries about the health of the economy, spooking markets and denting risk appetite. Nonfarm payrolls grew by 142,000, versus a 161,000 gain expected by economists polled by Dow Jones. However, the unemployment rate edged down to 4.2%, in line with expectations.

“August payroll data indicate risks are rising as the labor market is clearly softening, and the Fed needs to step in to cut off tail risks,” said Sonu Varghese, global macro strategist at Carson Group. “The report seals the deal for a September rate cut, but the big question really is whether the Fed goes big (by cutting 50 bps) to get in front of rising risks.”

Many investors remain optimistic that the Fed will cut rates by at least a quarter-percentage point at the conclusion of the September policy meeting later this month. Nearly half of traders are currently pricing in a 50 basis point cut, according to CME Group FedWatch tool.

Friday’s data print comes on the heels of a rocky week for equity markets. The S&P 500 is on pace for a 4% decline and its worst week of the year, while the Nasdaq is down 5.4% and headed for its worst week since April. The 30-stock Dow has slumped 2.6%.