S&P 500 plunges on tech collapse and economic concerns

The S&P 500 suffered its worst weekly decline since March 2023 on Friday, as investors grappled with a weaker-than-expected August jobs report and shed leading tech stocks.

The broad index slid 1.73 per cent to settle at 5,408.42, while the Nasdaq Composite shed 2.55 per cent to close at 16,690.83. The tech-heavy index ended the session more than 10 per cent off its record close. The Dow Jones Industrial Average fell 410.34 points, or 1.01 per cent, to end at 40,345.41.

Turning to US sectors, all closed lower overnight except for Real Estate, which closed higher by just 0.01 per cent. Communications was the worst performer, closing lower by 2.9 per cent.

Megacap tech stocks took a significant hit as investors dumped risk assets amidst rising worries about the US economy.

The NYSE Fang+ Index, tracking major tech stocks, dropped 4.2 per cent, whilst the Philadelphia Semiconductor Index fell 4.5 per cent, largely due to Broadcom’s decline.

Amazon declined 3.7 per cent, Alphabet slumped 4 per cent, and Meta Platforms lost more than 3 per cent. Broadcom shed 10 per cent on lacklustre current-quarter guidance, pulling down other semiconductor names like Nvidia and Advanced Micro Devices, which both dropped about 4 per cent.

Friday's moves capped a turbulent week for equity markets. The S&P 500 registered a 4.3 per cent decline, the Nasdaq shed 5.8 per cent, and the Dow Jones Industrial Average slumped 2.9 per cent.

The August jobs report added to concerns of a slowing labour market. Weak economic data has rattled markets and dampened risk appetite in recent weeks. Nonfarm payrolls grew by 142,000, below the expected 161,000, while the unemployment rate ticked down to 4.2 per cent in line with expectations.

Investors widely anticipate the Fed to cut rates by at least a quarter-percentage point at its upcoming policy meeting, but softening labour market trends have increased bets on a larger rate cut. Traders are divided on whether the Fed will cut by a quarter- or half-percentage point, according to the CME Group FedWatch Tool.

Futures

The SPI futures are pointing to a 1.3 per cent fall.

Currency

One Australian dollar at 7.45am was buying 66.67 US cents.

Commodities

Gold lost 0.73 per cent. Silver dropped 3.15 per cent. Copper lost 1.55 per cent. Oil fell 2.14 per cent.

Figures around the globe

European markets closed lower. London’s FTSE lost 0.73 per cent, Frankfurt fell 1.48 per cent, and Paris closed 1.07 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei fell 0.72 per cent, Hong Kong’s Hang Seng was closed on Friday, while China’s Shanghai Composite closed 0.81 per cent lower.

On Friday, the Australian share market closed 0.39 per cent higher at 8013.

Ex-dividends
Aust Finance Grp (ASX:AFG) is paying 4 cents fully franked
CSL Limited (ASX:CSL) is paying 220.2978 cents unfranked
HUB24 Ltd (ASX:HUB) is paying 19.5 cents fully franked
L1 Long Short Fund (ASX:LSF) is paying 6 cents fully franked
Objective Corp (ASX:OCL) is paying 9 cents unfranked
Perseus Mining Ltd (ASX:PRU) is paying 3.75 cents unfranked
Super Ret Rep Ltd (ASX:SUL) is paying 37 cents fully franked
Super Ret Rep Ltd (ASX:SUL) is paying 50 cents fully franked
Viva Energy Group (ASX:VEA) is paying 6.7 cents fully franked

Dividends payable
FSA Group Ltd (ASX:FSA)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap, Marketech.
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