Wall Street Slips as Tech Sector Leads Losses Amid Mixed Economic Data

U.S. stocks declined on Thursday despite some data that suggested the Federal Reserve may cut interest rates in December. The market was pressured by weak nonfarm payrolls, which highlighted slower job growth, while gains in weekly unemployment claims were largely ignored.

Adding to market uncertainty is the nomination of Kevin Hassett to succeed Jerome Powell as Fed chair, a move that has drawn attention due to his support for accommodative monetary policies.

The S&P 500 fell 0.1%, the tech-heavy Nasdaq 100 dropped 0.2%, and the Dow Jones Industrial Average also lost 0.1%.

Technology Sector Weakness

The tech sector was a major drag, with semiconductor companies underperforming. Micron Technology, Intel, and ON Semiconductor each fell over 3%, while ASML, Lam Research, and GlobalFoundries declined more than 1%.

Some positive news supported other areas of the market. Dollar General shares rose over 11% after raising full-year sales forecasts. Meta Platforms gained more than 4% following CEO Mark Zuckerberg’s announcement of a 30% budget cut for the Metaverse division next year. Hormel Foods also climbed over 2% after reporting stronger-than-expected quarterly results.

Rising Bond Yields Add Pressure

U.S. Treasury yields climbed, with the 10-year yield rising 3 basis points to 4.09%. This followed a drop in weekly unemployment claims to 191,000, their lowest level in three years, reflecting a strong labor market. Meanwhile, a Reuters report indicated that the Bank of Japan may raise interest rates this month, pushing Japanese bond yields to an 18-year high and adding global market pressure.

Mixed Labor Market Signals

November saw job cuts rise 23.5% year-over-year to 71,321, the highest November level in three years, though below forecasts. This combination of declining unemployment claims and higher layoffs presents a mixed picture, keeping markets cautious ahead of the Fed’s upcoming meeting.