US stock markets struggle as tech bleeds and rate hike worries creep in
US stock markets opened lower and have continued to sell off.
The S&P 500 is down 87 points or 1.1%, the Nasdaq Composite down 1.9% and the Russell 2000 down 1.5%.
Futures were already negative but the selling accelerated after today's non-farm payrolls report. It showed the US adding 172K jobs in May compared to 85K expected. The March and April reports were also revised higher by a combined 72K jobs.
When you zoom out, the US jobs picture looks suddenly firm and likely accelerating.
This also dovetails with a very strong JOLTS job openings report earlier this week.
The market suddenly sees a nearly 50% chance of a Fed hike in September and US 2-year yields are up 8.4 bps to 4.13%. The Fed will enter its blackout period at midnight today and in a fortnight we will get the first decision and press conference in the Kevin Warsh Fed. That has the potential to create some serious volatility.
Aside from the macro, the high-flying AI trades that have led the market since the March market bottom (and since September) are takin a break after Broadcom shares were beaten up earlier in the week on earnings that weren't strong enough to sustain the mania ongoing in the sector.
Some laggards today that have been major recent winners:
- WDC -7.4%
- MU -6.6%
- INTC -6.4%
- QCOM -5.4%
- AVGO -3.9%
In the larger-cap tech space:
- NVDA -2.4%
- TSLA -1.5%
- AMZN -0.1%
- MSFT -0.6%
- META -0.9%
- GOOG -0.6%
- ORCL -5.6%
- IGV software ETF -2.2%
There are some winners in the staples space including:
- KO +2.8%
- COST +2.4%
- MCD +2.0%
- CL +2.0%
- WMT +2.0%
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