Following Thursday's sell-off, stocks are likely to experience further declines in early trading on Friday. Futures for the major indexes currently indicate a lower market opening, with S&P 500 futures down by 1.8%.
Concerns about the U.S. economic outlook persist, fueled by a Labor Department report which revealed that employment growth in July was significantly below expectations. According to the report, non-farm payrolls increased by 114,000 jobs in July, following a downwardly revised gain of 179,000 jobs in June. Economists had anticipated a rise of 175,000 jobs, a downgrade from the originally reported 206,000 jobs for June.
The report also noted an unexpected rise in the unemployment rate, which climbed to 4.3% in July from 4.1% in June. Economists had expected the rate to remain unchanged. This increase marks the highest unemployment rate since October 2021 when it reached 4.5%.
Recently, weaker-than-expected economic data has buoyed the markets on the assumption that it would prompt the Federal Reserve to lower interest rates. However, traders are now concerned that the Fed might have delayed rate adjustments too long, potentially steering the U.S. into a recession.
Negative sentiment is further amplified by the latest earnings reports. Intel (INTC) shares dropped by 24.5% in pre-market trading after the semiconductor giant posted weaker-than-expected second-quarter results. Likewise, Amazon (AMZN) is experiencing significant pre-market weakness due to disappointing second-quarter revenues and a bleak outlook for the current quarter. Even Apple (AAPL) shares are trending downward in pre-market trading, despite the tech giant surpassing analyst expectations in its fiscal third-quarter results.
Later today, the Commerce Department is set to release data on new orders for U.S. manufactured goods for June. Factory orders are projected to have declined by 2.9% in June following a 0.5% decrease in May.
On Thursday, stocks initially extended Wednesday's rally but sharply declined over the course of the trading day. Major indices showed significant losses: the Nasdaq dropped 405.25 points, or 2.3%, to 17,194.15; the S&P 500 fell 75.62 points, or 1.4%, to 5,446.68; and the Dow decreased by 494.82 points, or 1.2%, to 40,347.97.
Internationally, Asia-Pacific stock markets saw significant declines on Friday. Japan's Nikkei 225 plummeted by 5.8%, and Hong Kong's Hang Seng fell by 2.1%.
European markets have also trended downwards today. Germany's DAX Index dropped by 1.4%, France's CAC 40 is down by 0.6%, and the U.K.'s FTSE 100 has decreased by 0.1%.
In commodities trading, crude oil futures are down $1.26 to $75.04 per barrel, after a $1.60 decline to $76.31 per barrel on Thursday. Gold futures, which nudged up $7.80 in the previous session to $2,480.80 an ounce, are now surging $34.80 to $2,515.60 an ounce.
In the currency market, the U.S. dollar is trading at 147.16 yen, down from 149.36 yen at Thursday's New York close. Against the euro, the dollar is valued at $1.0860, compared to $1.0791 yesterday.
