U.S. stock and bond markets were closed on Monday, Sept. 2, in observance of Labor Day.
On Tuesday, U.S. stocks fell following the release of data hinting at an economic slowdown, which caused the Chicago Board Options Exchange’s Volatility Index to surge by over 30%.
By Tuesday’s close, The Dow Jones Industrial Average, the Nasdaq composite and the S&P 500 lost 1.5%, 3.3% and 2.1% respectively, with the 10-Year-Treasury yield down to 3.8%.
On Wednesday, concerns over a weakening labor market led the S&P 500 to decline for the second day in a row, just days the jobs report release. The broad index fell 0.2%, while the Nasdaq dropped 0.3%. Meanwhile, the Dow gained 38 points, or 0.1%.
With increasing concerns about a slowdown, the U.S. Department of Labor reported on Wednesday that U.S. job openings dropped to 7.7 million in July. This decline was larger than economists had anticipated and marked the lowest level since 2021.
Markets closed on Thursday with the S&P 500 falling for a third straight day, down 0.3%. The Nasdaq rose 0.3% and the Dow lost 0.5%. The 10-Year-Treasury Yields closed at 3.725%, with a one-day change of -3.4 basis points and a year-to-date drop of 21.5 basis points.
On Friday, U.S. stocks plunged after the release of the jobs report. The report revealed a drop in unemployment which decreased from 4.3% to 4.2%. Employers added 142,000 jobs in August, which is an improvement from July, but was notably short of the 161,000 consensus forecast.
At close, the S&P 500, the Dow and the Nasdaq lost 1.7%, 1.0% and 2.5% respectively.
This week saw numerous earnings reports, with most exceeding expectations. However, despite strong earnings, the guidance aligned with projections and did little to impress. Cautious forecasts regarding a slowdown in consumer spending introduced uncertainty into the market.
Incorporating a cautious, diversified strategy can help maintain vigilance during uncertain times. Exercising careful judgement is essential, and staying well-informed will be crucial in navigating the current economic landscape.