U.S. stocks slid during midday trading on Friday after a modest market open, as the Labor Department’s release of August employment numbers didn’t buoy investors’ hopes for too long.
Around 11:30 a.m., two hours after market open, the Dow Jones industrial average was down nearly 505 points, or almost 1.8 percent, after opening up nearly 152 points, or 0.5 percent. The Standard & Poor’s 500 index was down almost 83 points, or 2.4 percent, after opening up almost 15 points, or 0.4 percent. The tech-heavy Nasdaq composite was hardest hit, down 430 points, or 3.75 percent, after opening up 55 points, or 0.5 percent.
After an uptick that analysts consider atypical for September, the market plummeted during Thursday’s trading, dragged down by tech giants. Friday’s trading seems to be reflecting a similar selling frenzy. Analysts said the selling frenzy wasn’t unexpected after the market’s recent upswing of uninterrupted gains, and spectators should expect more volatility as the market readjusts.
On Friday morning, the federal government announced employment numbers for August: 1.4 million, placing the unemployment rate at 8.4 percent. This is the first time the unemployment rate has fallen below 10 percent since the pandemic began.
Chris Rupkey, chief financial economist for MUFG, was cautious with his optimism that the morning’s employment news meant the economy was well on its way to recovery.
“Don’t tell the rally in stock futures and bond yields this morning who think the unexpected drop in unemployment heralds a return to the best economy ever at the start of the year before the pandemic lockdown of the country. Yeah, the Fed will be raising rates again before you know it,” he said in an email. “The good news is the tremendous uncertainty the economy and the nation faces is not stopping the return of many of the millions of the jobs lost during the pandemic recession’s worst days in March and April.”