Dow Jones Industrial Average sewered by bad NFP print

• Dow Jones plummeted over 900 points top-to-bottom on Friday.
• US NFP jobs data came in well below forecasts, worst initial print since 2019.
• Souring US economic data sends investors piling into rate cut bets.

The Dow Jones Industrial Average (DJIA) plummeted over 900 points peak-to-trough on Friday after the monthly US Nonfarm Payrolls (NFP) printed its lowest initial figure since May of 2019. Steep revisions to previous figures further depressed the market’s outlook on the US employment landscape, and a rising US unemployment rate has sent investors scrambling to bet on an accelerated pace of rate cuts from the Federal Reserve (Fed).

Friday’s US NFP labor data dump showed the US added 114K net new jobs in July, well below the forecast 175K and the previous month’s figure was revised to 179K from the initial print of 206K. The US Unemployment Rate also ticked higher to 4.3%, the highest reading since November of 2021, while the U6 Underemployment Rate rose to 7.8% from 7.4% as employed people struggle to find jobs that provide enough hours.

Average Hourly Earnings growth also eased to 0.2% MoM from the expected hold at 0.3%, with YoY wages growth cooling to 3.6% from the previous 3.8%.

With US economic data turning broadly sour, investors extended a two-day decline on growing fears of a broad recession within the domestic US economy, sparking a flight out of risk assets and sending equity indexes broadly lower. According to the CME’s FedWatch Tool, rate traders have fully priced in a rate cut in September, with 70% odds of a double-cut for 50 basis points when the Fed gives its rate call on September 18.

Dow Jones news

Over two-thirds of the Dow Jones is in the red on Friday, with slim gains getting entirely swamped out by steep losses in key tech stocks. Intel Inc. (INTC) plummeted nearly 30% on Friday, tumbling to almost $21.00 per share after the major software company announced quarterly revenue that missed guidance, earning $12.83 billion in the second quarter, down 1% from the same time last year and missing the analyst forecast of $12.94 billion. Intel also revised their current-quarter revenue forecast to between $12.5 billion and $13.5 billion, less than the analyst expectation of $14.35 billion. In a bid to appeal to the markets, Intel announced plans to lay off 15% of their workforce in the coming months in order to trim labor costs.

Dow Jones technical outlook

Dow Jones plummeted into a second day of losses, falling over 900 points at Friday’s absolute bottom and slipping below the 40,000.00 major price handle. DJIA is struggling to find the brakes as bids fall below the 50-day Exponential Moving Average (EMA) at 39,683.02, and bulls will be looking to restore balance before price action can extend a decline back to the 200-day EMA at 37,982.00.

Dow Jones five minute chart

Dow Jones daily chart