The tendency for the S&P 500 index futures to finish the week on the highs or lows played out once again. This time, Friday’s session finished at the lows of the week following the latest US employment report and several Fed speeches throughout the day.
Overnight, the bulls couldn’t get the index into the green for more than a few minutes, leaving the bears to rule most of the action. During premarket hours, support was found near August 14’s low of 5471.75, which held for the rest of the premarket session. At 8:30am EDT, August’s US employment report came out mixed. Among the highlights, 142,000 jobs were added compared to 161,000 expected, the unemployment rate remained the same at 4.2%, and US hourly wages increased by 0.4% compared to 0.3% expected. The jobs data seemed to ignite optimism from the bulls, who drove the index futures back into the green.
The regular session began a hair above unchanged, and the bulls and bears immediately battled for dominance as New York Fed President Williams continued his speech. His comments more or less indicated the Fed is now focusing on balancing their inflation and job mandates. As his speech continued, sellers started to gain dominance and were soon breaching the premarket low.
Fed Gov. Waller also spoke during the day, starting at 11:00am EDT. His comments indicated he is open to larger upcoming rate cuts, as long as the data supports it, of course. His comments seemed to ignite a sharp 30+ handle rally back up near the premarket low, which was sold off just as quick. As market participants continued to digest the day’s news, bears came to rule the action. According to the CME FedWatch tool, the chance of a 25bp cut in September increased to 70%, while chances of additional cuts between 50-125bps later this year increased as well.
Support was found in the 5410’s, where most of the afternoon’s trading took place. In the final few minutes, neither the bulls or bears were able to make much progress in either direction. The session concluded above the day’s low at 5419.50, losing 92.75 handles. The decline also continued after hours to make a new low of 5394. As of the close, that marks a swoon of 241.50 handles or 4.27% for the week.
There were no winners among the top components of the index, therefore Apple Inc (NASDAQ: AAPL) was the smallest loser. The tech giant declined by $1.56 or 0.70% to close at $220.82 for the day, ahead of its iPhone/AI event coming up on Monday.
That performance was nearly one percent better than the cash index’s decline of 1.68%.
The biggest loser was easily Broadcom Inc (NASDAQ: AVGO), after releasing their latest earnings report after hours Thursday. Though the company announced small top and bottom-line beats, poor guidance for the upcoming quarter had investors heading for the exit. For the day, the chip designer declined by $15.83 or 10.36% to close at $137.00.
