Stock markets were hit by a global sell-off on Friday as weak US jobs growth stoked fears of a sudden downturn in the world’s largest economy.
The tech-heavy Nasdaq index dropped by more than 2.4%, dragged lower by Intel and Amazon, after the companies reported disappointing results.
Official data showed employers added 114,000 jobs in July, far fewer than expected, while the unemployment rate rose to its highest level in nearly three years.
The figures suggested the long-running jobs boom in the US might be coming to an end and drove speculation about when and by how much the Federal Reserve will cut interest rates.
Stock markets were already worried about high borrowing costs and unsettled by signs that a long-running rally in share prices, fuelled in part by optimism over artificial intelligence (AI), might be running out steam.
Friday’s decline in the Nasdaq brought the index down about 10% from its most recent peak – a fall known as a “correction” – that in this case has happened in a matter of weeks.
The Dow Jones Industrial Average also dropped 1.5% on Friday, and the S&P 500 ended 1.8% lower, after markets in Asia and Europe sank.
In Japan, the Nikkei 225 index tumbled nearly 6%.
Earlier this week, the Federal Reserve held interest rates again, but signalled it was likely to cut rates at its next meeting in September.
“Now the question isn’t will they [Federal Reserve] cut in September, but by how much,” said Jay Woods, chief global strategist at Freedom Capital Markets.
Source:bbc.com
