- The Dow Jones dropped another 400 points on Friday following a disappointing NFP jobs report.
- US job growth remains weak, with downside revisions adding to concerns.
- Despite the NFP miss, market expectations favor a 25 bps rate cut.
Dow Jones Industrial Average (DJIA) Drops 400 Points Following Disappointing NFP Report
The Dow Jones Industrial Average (DJIA) fell 400 points on Friday after the US Nonfarm Payrolls (NFP) data missed expectations and previous figures were revised downward. The weaker job growth signals a slowing US economy, though not enough to increase expectations for a significant rate cut from the Federal Reserve (Fed) later this month.
According to the Bureau of Labor Statistics (BLS), US NFP employment increased by 142,000 in August, falling short of the anticipated 160,000. Additionally, July’s numbers were revised down to 89,000 from the initial 114,000. Despite the overall disappointing jobs data, US Average Hourly Earnings rose by 3.8% year-over-year in August, surpassing the expected 3.7% and up from the previous 3.6%.
The August NFP report showed slower-than-expected job growth, which supported rate cut expectations. However, the overall jobs report was mixed, with gains primarily in leisure, hospitality, health care, and social assistance sectors. Manufacturing, retail trade, and information sectors experienced declines, highlighting a potential economic slowdown and impacting the Dow Jones, which heavily represents manufacturing.
Despite the miss in employment figures and concerns about a potential recession, market expectations for a double rate cut on September 18 have eased. The CME FedWatch Tool now shows a 75% probability of a 25 basis point cut, with only a 25% chance for a 50 basis point cut. This is an improvement from earlier this week when a 40-60 split favored a double cut.
Dow Jones News
The Dow Jones was significantly impacted on Friday, with nearly all listed stocks falling. McDonald’s (MCD) was one of the few gainers, rising 1.3% to $292.00 per share, while Procter & Gamble (PG) increased by 0.5% to $176.35 per share. American Express (AXP) saw the largest decline, dropping 3.3% to $243.60 per share, followed closely by Amazon.com (AMZN), which fell about 3.25% to $172.00 per share.
Dow Jones Price Forecast
The Dow Jones chart is approaching the 50-day Exponential Moving Average (EMA) at 40,283, following a 3% decline over the past week from a record high of 41,574. Despite recent losses, the DJIA remains in a strong position, with a further 4.65% decline needed to reach the 200-day EMA at 38,434. Buyers are expected to defend key support near the 40,000 level.
Dow Jones Daily Chart
