Nasdaq 100, Dow Jones, S&P 500: Marginally Higher Despite Fed Rate Hike, Job Growth Concerns

Highlights

• Major stock indexes settle slightly higher
• Weekly jobless claims above expectations causing investors to question Fed
• S&P 500 had first losing week in four, Nasdaq post 1.1% weekly loss

Overview

The US stock market closed higher accross the board on Thursday.

The Dow Jones Industrial Average gained 2.57 points, or 0.01%, to close at 33,485.29. The S&P 500 Index rose by 14.64 points, or 0.36%, to end at 4,105.02, while the tech-heavy Nasdaq Composite increased by 91.10 points, or 0.76%, to finish at 12,087.96.

However, the S&P 500 still had its first losing week in four, losing 0.1%, while the Nasdaq fell by 1.1%.

The market remained volatile due to higher than expected weekly jobless claims, which indicated slowing job growth.

Job cuts have increased significantly this year compared to last year. And the number of available positions fell below 10 million in February for the first time in almost two years.

Investors are now questioning if the Federal Reserve has gone too far in its efforts to cool inflation. And if it will cause a recession.

The March jobs report will be closely monitored by investors, but many believe the trend of solid job growth is about to reverse. The jobless claims data suggests that the Fed’s rate hikes are beginning to slow down the labor market. However, the slow down in the economy, is increasing the likelihood of a recession.

Mixed Performances in U.S. Stock Market Sectors and Stocks

On Thursday, the U.S. stock market closed higher but experienced a mixed performance across sectors and stocks.

Of the 11 S&P 500 sector indexes, seven declined, with consumer discretionary down 2.04% and industrials down 1.3%.

Nvidia Corp dropped 2.1% after Google’s announcement that its supercomputers were faster and more power-efficient than comparable components made by the chipmaker, causing it to weigh down on the S&P 500.

Tesla Inc fell 3.7%, while Amazon and Apple declined more than 1%, leading to a reversal of gains in some of Wall Street’s most valuable companies in recent weeks and pulling down the Nasdaq.

Caterpillar, a bellwether for the industrial sector, dropped 1.8%, bringing its loss over the past two days to 7% as investors worried about a potential economic downturn.

Johnson & Johnson, on the other hand, rallied 4.5% after settling talc-related lawsuits, gaining the support of thousands of claimants and easing an overhang on its plans to list consumer health unit Kenvue.

Artificial intelligence company C3.ai Inc tumbled more than 15% for a second day after a short seller alleged accounting issues, although the company denied the allegations.

FedEx Corp rose 1.5% as the freight bellwether firm announced plans to fold its operating divisions into one organization to cut costs and increase efficiency.

S&P 500: Declining Stocks Outnumber Rising Shares

Overall, declining stocks outnumbered rising ones within the S&P 500 by a 1.2-to-one ratio, with the index posting 11 new highs and 2 new lows.

Meanwhile, the Nasdaq recorded 39 new highs and 269 new lows. Volume on U.S. exchanges was relatively light, with 10.1 billion shares traded. Over the previous 20 sessions it averaged  12.7 billion shares over the previous 20 sessions.

S&P 500 Earnings Expected to Decline

In the upcoming March-quarter reporting season, big banks including JPMorgan Chase & Co and Citigroup will be among companies reporting, with investors eager for updates on the health of the financial industry.

Analysts on average expect aggregate S&P 500 company earnings for the first quarter to have fallen 5% year-over-year, according to Refinitiv I/B/E/S.