Stocks Lose Momentum and Unemployment Rate Rises, Fueling Speculation of Fed Rate Cut
After a powerful rally led by big tech names, stocks lost momentum and turned downward during afternoon trading on Friday. Investors pulled back, possibly due to concerns about the February jobs report, which showed an uptick in the unemployment rate. This bolstered investor confidence that the Federal Reserve will cut rates following its June meeting.
The S&P 500 trended near the flatline after logging another record close on Thursday, while the Dow Jones Industrial Average increased by close to 0.3%. The tech-heavy Nasdaq Composite lost 0.3% after a sharp gain the previous day.
The non-farm payrolls report for February showed that the US economy added 275,000 jobs, surpassing Wall Street expectations. However, the unemployment rate ticked up to 3.9%, marking its first increase in four months. Futures on the three major averages were trading in red figures ahead of the jobs data.
Chair Jerome Powell’s recent statement that the Federal Reserve is “not far” from being confident inflation is in the right place for the central bank to start bringing down borrowing costs provided a boost to the market this week.
In other parts of the world, policymakers from the European Central Bank expressed support for a rate cut before their summer break due to falling inflation rates. Additionally, Bank of Japan officials are reportedly considering lifting rates out of the negative zone.
On the corporate front, Costco shares fell 7% after its quarterly sales missed expectations. However, it did report an earnings beat. Broadcom’s revenue beat and forecast for $10 billion in sales of AI-linked chips failed to impress investors, resulting in a more than 6% drop in the stock.
Gold futures continued to rally, with spot gold eyeing its biggest weekly jump in five months amid optimism for a mid-year Fed rate cut.
Stocks Trending in Afternoon Trading
During afternoon trading on Friday, several stocks were leading Yahoo Finance’s trending tickers page. Here are some of them:
Bitcoin: The world’s largest cryptocurrency reached an all-time high, surpassing $70,000 for the first time. However, it quickly dropped to around $68,000 as some investors locked in their profits. The recent surge in bitcoin’s price lifted it to levels not seen since late 2021.
Nvidia: The stock, which is at the center of Wall Street’s AI excitement, pulled back nearly 5% during afternoon trading. The company’s remarkable rise has attracted intense investor interest as tech companies relying on Nvidia’s technology increase their investments in the rapidly developing field.
Costco: Shares of the warehouse retailer fell by more than 7% after the company reported mixed second-quarter results.
Rivian: The all-electric car company rose 2% during afternoon trading after unveiling two new lower-priced SUVs. The first of the two, a midsize SUV called the R2, will start at around $45,000 and is expected to be shipped in the first half of 2026. Rivian aims to attract a broader consumer base, similar to Tesla’s Model 3.
Stocks Wobble in Afternoon Trading
After a powerful surge, investors took a breather, sending stocks mostly lower during afternoon trading on Friday. This pause interrupted the tech-led rally that had been driving the market.
The S&P 500 trended near the flatline after logging another record close on Thursday, while the Dow Jones Industrial Average increased by close to 0.3%. The tech-heavy Nasdaq Composite lost 0.3% after a sharp gain the previous day.
RealPage Expects ‘Muted’ Rent Growth in 2024
Renters across the country can expect “muted” rent growth this year due to an influx of apartment supply. Asking rents for professionally managed apartments only increased by 0.2% in February compared to the previous year, significantly lower than the historical average of 0.6% dating back to 2010.
RealPage, a data provider, stated in a report that this muted rent growth is expected to continue throughout 2024 as supply continues to put downward pressure on rents. Austin experienced the biggest decline in rent growth, with a 6.7% decrease annually in February. On the other hand, Virginia Beach led rent increases with a 3.3% uptick.
Although strategists have been anticipating a slowdown in rents, the Consumer Price Index (CPI), an inflation gauge, has shown rents to be sticky. Analysts attribute this to a lag in the data. The February CPI will be released on Tuesday.
Overall, apartment occupancy remained steady at 94.1% in February, according to RealPage. However, record-high construction activity in the apartment sector poses a challenge to occupancy levels this year, with nearly 962,000 units under construction nationally at the end of 2023 and an additional 672