The New York Stock Exchange ended on a mixed note Wednesday, with the market concerned about the health of the U.S. economy but reluctant to commit before the release of a crucial employment report on Friday.
The Dow Jones Industrial Average edged up 0.09%, the Nasdaq Index fell 0.30% and the broader S&P 500 Index lost 0.16%.
As the day before, which saw a sudden drop, “investors fear a weakening of the economy,” commented Jack Ablin of Cresset Capital.
This impression was reinforced by a report from the Ministry of Labor, according to which the number of job offers fell in July to its lowest level since January 2021.
As for layoffs, they jumped by 13%, to their highest since March 2023.
In the process, operators have recalibrated their expectations regarding monetary policy and now attribute a probability of 45% to the hypothesis of a rate cut of half a point at the end of the next meeting of the American central bank (Fed), in mid-September.
Bond rates reacted immediately. The yield on 10-year US government bonds fell to 3.76%, compared to 3.83% the previous day at the close.
The deterioration in economic conditions has penalized so-called cyclical stocks, i.e. those sensitive to the economic situation, such as the construction machinery manufacturer Caterpillar (-1.03%) or the sports equipment manufacturer Nike (-0.37%).
It also further weighed down oil prices and major energy names such as ExxonMobil (-1.22%) and Chevron (-1.79%).
After their tumble on Tuesday, semiconductors have recovered, with the notable exception of Nvidia, which has dropped another 1.66%.
Still, “I don’t see a lot of conviction among investors today,” Ablin said. “The trend is weakening, but there’s no momentum in that direction.”
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“We are positioning ourselves” ahead of the employment report on Friday, considered crucial before the Fed meeting, “but there is no panic,” according to the analyst.
Nancy Vanden Houten of Oxford Economics pointed to the Fed’s Beige Book, released Wednesday, which takes the temperature of the U.S. economy on the ground via the central bank’s regional offices.
The report “paints an economy that is slowing down, but remains far from recession,” she said.
On the stock market, US Steel plunged 17.47% after the Washington Post reported that US President Joe Biden was preparing to formally block the takeover of the American steelmaker by its Japanese rival Nippon Steel.
Nordstrom (-0.18%) did not benefit from the announcement of an offer from the founding family of the department store chain, which wants to take the group private. They are offering $23 per share, a price close to the current price ($22.78).
Discount chain Dollar Tree was penalized (-22.16%) for a profit warning. Chief Executive Todd Vasos said many of the chain’s regulars felt “financially constrained.”
Shares in Donald Trump’s media group, TMTG (-6.08%), fell to their lowest level since its IPO in late March, reached on Tuesday.
Investors are concerned that Donald Trump will sell all or part of his shares after a six-month period following the stock market launch, as the company allows him to do.
They also wonder about the future of his social network Truth Social in the event of defeat in the presidential election, and have not welcomed the return of the former head of state to X (ex-Twitter), on which he is once again publishing extensively.
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