[New York Stock Market] Decline Despite Employment Slowdown... S&P 500 Falls for Fourth Consecutive Day

The three major indices of the U.S. New York stock market showed a downward trend on the 4th (local time) despite news that employment increased less than expected.

On that day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 35,065.62, down 150.27 points (0.43%) from the previous session. The S&P 500 index, which focuses on large-cap stocks, fell 23.86 points (0.53%) to 4,478.03, and the Nasdaq index closed down 50.48 points (0.36%) at 13,909.24.

[Image source=Yonhap News]

The Dow index declined for three consecutive trading days, while the S&P 500 and Nasdaq indices fell for four consecutive trading days. Since the beginning of this week, the S&P 500 and Nasdaq indices have dropped by 2.27% and 2.85%, respectively. The Dow index fell by 0.97%.

Investors closely watched Big Tech earnings, employment data, and U.S. Treasury yield movements. After the market closed the previous day, Apple and Amazon, which reported earnings, showed different stock price trends.

In Apple's case, sales and net profit exceeded market expectations, but concerns among investors grew due to three consecutive quarters of declining sales and decreases in iPhone, Mac, and iPad sales. In particular, the stock price fell nearly 5% after indicating that sales would decline in the next quarter as well. However, analysts generally maintained a "buy" rating on Apple and showed an optimistic outlook.

Amazon's quarterly sales and net profit exceeded expectations, with quarterly sales increasing by about 11%, marking double-digit growth for the first time in six quarters. Additionally, Amazon's stock price rose more than 8% due to next quarter sales forecasts surpassing market expectations.

U.S. employment maintained a slowing trend, but the stock price, which showed an upward trend early in the session, became volatile and closed lower in the afternoon. The U.S. Department of Labor reported that nonfarm payrolls increased by 187,000 in July, falling short of the market expectation of 200,000. Last month's figure was significantly below the average monthly increase of 312,000 over the past year.

However, the July unemployment rate was 3.5%, lower than both market expectations and the previous month's 3.6%. This is the lowest figure since April. The wage growth rate was also 4.36%, exceeding the previous month's 4.35% and market expectations of 4.2%, indicating that inflationary pressure from wages remains.

The U.S. Federal Reserve (Fed) has stated that it will base its September interest rate decision on economic indicators. If inflation and employment slow faster than expected, the likelihood of holding rates steady increases, but the data released on this day was not sufficient to ease market concerns about tightening.

U.S. Treasury yields also turned downward after the employment data release. The 10-year Treasury yield traded around 4.04%, down about 13 basis points (1bp=0.01%) from the previous day, the 2-year Treasury yield fell about 12 basis points to around 4.76%, and the 30-year Treasury yield dropped about 9 basis points to around 4.20%.

Experts point out that news of slowing employment makes the Fed less hawkish, but rapid deterioration in indicators could raise recession concerns again. Christopher Harvey of Wells Fargo said, "The employment figures on this day showed nothing. They only reinforced the view that the Fed has done what it needs to do at this point." He added, "If inflation figures come out stronger than expected, it could change market perceptions of the Fed and also the Fed's own perception."

Mike Lowengart, head of model portfolio construction at Morgan Stanley Global Investment Office, said, "The basic assumption is that rates will stay higher for longer, but if employment figures continue to slow, it becomes easier for the Fed to move less hawkishly." He added, "(However) this is a double-edged sword. If the labor market slows too much, recession concerns could gain strength again."

This content was produced with the assistance of AI translation services.