Stocks experienced a robust beginning to Friday's trading, but a significant downturn took place mid-session. The major indexes, such as the tech-loaded Nasdaq, withdrew significantly from their early peaks.
Later in the session, a recovery attempt failed, leading the major indexes to finish the day significantly in negative territory. The Nasdaq lost 188.26 points or 1.2% to close at 16,085.11, S&P 500 fell by 33.67 points or 0.7% to 5,123.69, and the Dow diminished by 68.66 points or 0.2% to 38,722.69.
The major indexes all declined for the week, with Nasdaq down by 1.2%, Dow by 0.9%, and the S&P 500 by 0.3%.
Early optimism in Wall Street emerged from the Labor Department's closely observed monthly jobs report, fostering positive sentiment about the future of interest rates. Yet, despite job growth being stronger than expected in February, the report revealed significant downward revisions to job growth in the previous two months.
The Labor Department reported a surge of 275,000 jobs in non-farm payroll employment in February, surpassing economists' projection of an increase of 200,000 jobs. However, job expansions in December and January were revised downwards to 290,000 and 229,000 jobs respectively. This signaled a net downwards revision of 167,000 jobs.
Unemployment rates rose to 3.9% in February from the previous 3.7% in January, contrary to economists' predictions of no change. The downward revisions, an unexpected rise in unemployment rates, and a slowdown in the annual wage growth rate stoke optimism that the Federal Reserve might begin to lower interest rates in June.
However, buying interest was somewhat muted as traders were hesitant to continue purchasing stocks ahead of critical inflation data release scheduled for the next week.
The steep market decline partly reflected profit-taking activities, as the Nasdaq and S&P 500 reeled under pressure after reaching new record intraday highs.
Semiconductor stocks, led by Nvidia (NVDA) with a 5.6% drop on the day, also contributed to the downturn after leading the markets higher on Thursday.
Considerable pressure was also notable in retail, airline, computer hardware, and networking stocks. Meanwhile, the commercial real estate stocks continued to show strength.
In international trading, most Asia-Pacific region stocks showed a positive trend on Friday. Japan's Nikkei 225 Index rose by 0.2%, China's Shanghai Composite by 0.6%, and South Korea's Kospi by 1.2%. However, European markets presented mixed results.
In the bond market, treasuries had a lackluster performance for most of the session and closed nearly flat.
Moving forward, traders are expected to focus on consumer and producer price inflation data, in addition to considering reports on retail sales, industrial production, and consumer sentiment.
