The S&P 500 index fell 4.2% last week, its largest weekly loss since March 2023, amid worries over weaker-than-expected August job growth and AI demand.
While the weekly drop starts September on a sour note, the market benchmark is still solidly in positive territory for 2024 with a year-to-date climb of 13%.
The August employment report showed nonfarm payrolls rose by 142,000, missing expectations compiled by Bloomberg for an increase of 165,000 jobs. July and June payrolls were revised downward. Still, the unemployment rate met expectations with a decline to 4.2% in August from 4.3% in July.
The technology sector led the weekly drop, falling 7.1% amid concerns that expectations for AI demand may have gotten too lofty, especially after chip maker Broadcom (AVGO) issued Q4 revenue guidance slightly below analysts’ mean estimate at the time. Broadcom’s stock had the largest percentage drop in the sector, tumbling 16%.
The tech slide was followed by a 5.6% drop in energy, a 5% slide in communication services, a 4.8% decline in materials and a 4.4% slip in industrials.
Consumer staples and real estate were the only sectors that rose last week, edging up 0.6% and 0.2%, respectively.
Economic data set to be released this week will include August consumer credit today, the August consumer price index on Wednesday, and the August producer price index on Thursday. Also, a preliminary reading of September consumer sentiment will be posted on Friday.
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