Stocks in the Dow Jones Industrial Average dropped on Friday, August 2nd following a weak job growth report for July. The report has sparked worries that the United States economy might be going into a recession.
The Dow Jones Industrial Average is a stock market index that measures the stock performance of 30 large publicly owned companies listed on stock exchanges in the US. The index includes major companies such as Apple, Microsoft, and Boeing, and it’s one of the best indicators of the “health” of US stocks and the country’s economy.
As of Friday morning, stocks of Dow Jones, The S&P 500 index, and the Nasdaq Composite all fell. The Dow Jones fell by 810 points while stocks of The S&P 500 and the Nasdaq Composite dropped by 2.4 and 3.3 percent, respectively.
Lack of job growth led to drop in stocks
Despite the employment rate in the US being the highest it has been since October 2021, job growth in July slowed more than previously expected by analysts.
In July, the underwhelming job growth is best seen in the lackluster growth of nonfarm payrolls.
Nonfarm payrolls refer to the total number of paid workers in the United States in any business excluding farmworkers, private household employees, non-profit employees, and some federal employees.
The US Labor Department reported that nonfarm payrolls only grew by 114,000 during July, a clear downgrade from the 179,000 jobs added in June. Dow Jones economists had expected a growth of 185,000 jobs for July, while the unemployment rate increased to 4.3 percent.
Stocks of high-profile companies are experiencing the Dow Jones drop
America’s most high-profile companies all trade in the Dow Jones and now have first-hand experience of the stock market’s drop.
The internet juggernaut, Amazon, is also feeling the effects of losses. The company slid by 9 percent on Friday after reporting projected losses for the following fiscal quarter.
Intel, which announced record layoffs, is also facing the consequences of the Dow Jones drop, and the company has slid 26 percent on the stock market exchange.
Apple, which is one of the most reliable companies in terms of stock performance has likewise experienced a slight fall. Despite this, however, the company posted a successful quarter in terms of revenue, with a total of $85.7 billion for the past quarter.
Tech corporations were not the only ones affected by the Dow Jones drop. Financial institutions such as the Bank of America also posted a 3 percent loss on Friday.
It is expected that stock market volatility will be sustained throughout August. It is expected that this will be amplified after the Federal Reserve hinted that a rate cut will be implemented next September.