Dow drops 400 points after weak data raises worries about U.S. economy: Live updates
Pia Singh
Samantha Subin
Michael M. Santiago | Getty Images News | Getty Images
The Dow Jones Industrial Average
fell Thursday, as fresh data stoked concerns over the state of the U.S. economy.
The 30-stock Dow dropped 446 points, or 1.1%. The S&P 500
shed 0.7%, while the Nasdaq Composite slipped nearly 1%.
Initial jobless claims rose to 249,000 for the week ended in July 27, higher than a Dow Jones forecast of 235,000. The ISM manufacturing index came in at 46.8, adding to a broader picture of slowing economic activity.
That data follows the Federal Reserve keeping rates unchanged and Chair Jerome Powell signaling a September rate is on the table. Yields fell Thursday as investors digested Powell’s comments, with the benchmark 10-year Treasury yield reaching its lowest level since Feb. 2.
“The economic data keep rolling on in the direction of a downturn if not recession this morning,” said Chris Rupkey, chief economist at FWDBONDS. “The stock market doesn’t know whether to laugh or cry because while three Fed rate cuts may be coming this year and 10-year bond yields are falling below 4.00%, the winds of recession are coming in hard.”
Fed funds futures trading indicated an 86% likelihood that the central bank cuts rates by 25 basis points at its September meeting, according to CME Group’s FedWatch Tool.
Stocks began the day on a high note, as Meta Platforms
rallied about 7% on stronger-than-expected second-quarter results and upbeat guidance.
Shake Shack
, meanwhile, jumped more than 15% after posting a revenue beat. Arm Holdings slid 14% after offering an underwhelming current-quarter guide. Moderna
plunged nearly 17% after slashing its full-year sales guidance.
29 Min Ago
10-year yield slips below 4% on manufacturing weakness, rate cut hopes
The 10-year Treasury note
yield dipped below the psychologically important 4% level Thursday as the manufacturing sector slipped deeper into contraction and expectations rose for the Federal Reserve to start lowering interest rates.
In morning trade, the yield on the benchmark debt instrument fell to 3.975%, off nearly 13 basis points, or 0.13 percentage point. The note hasn’t traded below 4% since early February.
U.S. 10 Year Treasury
RT Quote | Exchange
3.992% -0.112
Yield | 11:33 AM EDT
10-year Treasury yield
That came as the Institute for Supply Management reported that its index measuring factory activity in the U.S. for July slumped to 46.8%, down 1.7 percentage point from June and below the Dow Jones estimate for 48.9%.
As that report came in, traders upped their bets that the Fed will be cutting rates this year. They raised the odds for cuts at each of the three remaining Federal Open Market Committee meetings this year, and pushed up the likelihood of a full percentage point of reductions to about 20%, according to the CME Group’s FedWatch measure of 30-day fed funds futures contract pricing.
—Jeff Cox |
