Stocks opened higher Friday as investors mulled over the February jobs report. However, the main indexes swung lower mid-morning and stayed there through the close as several heavy hitters in the tech sector sold off.
Ahead of the open, data from the Bureau of Labor Statistics showed the U.S. added 275,000 new jobs in February, blowing past economists' expectations for 200,000 jobs. Still, job gains for both December and January were revised lower and the unemployment rate rose to 3.9% from 3.7%.
The February jobs report signaled robust hiring "while also showing an increase in unemployment, moderating wage growth, and anemic labor force participation," says José Torres, senior economist at Interactive Brokers. "Bulls were focusing on the weaker aspects of the report by buying up speculative assets, stocks, and bonds," Torres adds, but bears pulled "an intraday interception."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Indeed, any excitement over the downwardly revised readings and the rising unemployment rate quickly vanished as several large and mega-cap tech stocks sold off sharply – dragging the main indexes with them.
Nvidia's reversal erases $127 billion in market value
Most notable was Nvidia (NVDA), which was up more than 5% in early trading only to end the day down 5.6% – a drop of $127 billion in market value. The red-hot chipmaker is one of the best stocks of the year, up nearly 77% even with today's decline.
For some additional context, consider the fact that this year-to-date gain has increased NVDA's market value by $967 billion, or $95 billion more than Berkshire Hathaway's (BRK.B) entire market cap.
Given NVDA's jaw-dropping run up the price charts, it's likely today's decline was a result of profit-taking. However, there was weakness seen across the industry.
Fellow semiconductor stocks Broadcom (AVGO, -7.0%) and Marvell Technology (MRVL, -11.4%), for instance, both fell sharply after earnings. While Broadcom beat on its top- and bottom-lines for fiscal Q1, its full-year revenue fell short of analysts' estimates. Marvell, meanwhile, reported in-line results for its fourth quarter but gave weaker-than-anticipated first-quarter guidance.
SOTU address does little to move markets
Also making headlines Friday was President Joe Biden's State of the Union address. The president covered a variety of topics Thursday evening, including new homebuyer tax credits and drug prices. He also proposed raising the rates for large corporations and billionaires.
However, considering anything proposed in the State of the Union likely has a long and arduous path to becoming a reality, "the potential for higher taxes on the wealthy … isn't upsetting the apple cart for markets," says Ryan Detrick, chief market strategist at Carson Group.
Indeed, today's volatile session came courtesy of the jobs report and sell-off in tech stocks. As for the indexes, the Nasdaq Composite, which was up 1% at its intraday high, finished the day down 1.2% at 16,085. The S&P 500 closed down 0.7% at 5,123, while the Dow Jones Industrial Average shed 0.2% to 38,722.
February CPI on deck
Looking ahead, the February Consumer Price Index (CPI) is arguably the most anticipated event on next week's economic calendar. The report, due out Tuesday morning, "should alleviate concerns that inflation is reaccelerating after the January data," writes Stephen Juneau, economist at BofA Securities, in a note to clients.
Juneau expects the headline CPI to rise 0.4% month-over-month – quicker than January's 0.3% increase – due to rising gas prices. But core CPI, which excludes volatile food and energy prices, is believed to be up 0.3% from January to February, below the prior month's 0.4% reading.
Related content
- Max Is Latest Streamer To Crack Down On Password Sharing
- Senate Set To Vote On Six-Bill Spending Package To Avert Shutdown
- Kiplinger's Earnings Calendar
-
Fed's Rate Cuts Could Have Impacts You Might Not AnticipateUnderstanding how lower interest rates could impact your wallet can help you determine the right financial moves to make.
-
Past Performance Is Not Indicative of Your Adviser's ExpertiseMany people find a financial adviser by searching online or asking for referrals from friends or family. This can actually end up costing you big-time.
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
Past Performance Is Not Indicative of Your Financial Adviser's Expertise
Many people find a financial adviser by searching online or asking for referrals from friends or family. This can actually end up costing you big-time.
-
I'm a Financial Planner: If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us? A Retirement Psychologist Makes the CaseA retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm a Financial Adviser: This Is How You Can Adapt to Social Security UncertaintyRather than letting the unknowns make you anxious, focus on building a flexible income strategy that can adapt to possible future Social Security changes.
-
I'm a Financial Planner for Millionaires: Here's How to Give Your Kids Cash Gifts Without Triggering IRS PaperworkMost people can gift large sums without paying tax or filing a return, especially by structuring gifts across two tax years or splitting gifts with a spouse.
-
'Boomer Candy' Investments Might Seem Sweet, But They Can Have a Sour AftertasteProducts such as index annuities, structured notes and buffered ETFs might seem appealing, but sometimes they can rob you of flexibility and trap your capital.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Got $100 to Gamble? These Penny Stocks Could Be Worth the RideVolatile penny stocks are high-risk plays with potentially high rewards. If you have $100 you can afford to lose, these three names are worth a look.
