On September 6, the U.Sstock market faced a tumultuous day, with all three major indices closing in the redThis was the worst weekly performance observed since March 2023 for both the Dow Jones Industrial Average and the S&P 500, as the market reacted to weaker-than-expected August non-farm payroll data, which left investors divided on the extent of potential Federal Reserve interest rate cuts.

In a significant turn of events, Tesla's stock plummeted over 8%, resulting in a staggering market capitalization loss of nearly $62 billionThis decline came shortly after Tesla announced its roadmap for launching its Full Self-Driving (FSD) technology in China and Europe next year, pending regulatory approvals.

Furthermore, U.SWest Texas Intermediate (WTI) crude oil saw a steep drop of 2.1% on Friday, with the weekly loss reaching 8%, marking its worst weekly performance in nearly a year

Advertisements

The cumulative effect of dismal economic indicators and shifting market sentiments contributed to a rough start in the stock market for September.

As trading closed, the Dow fell by 1.01% to close at 40,345.41 points, the S&P 500 decreased by 1.73% to 5,408.42 points, and the Nasdaq Composite dropped by 2.55% to finish at 16,690.83 pointsObserving the broader picture, the Dow registered a 2.93% weekly decline, while the S&P and Nasdaq plummeted by 4.25% and 5.77% respectively.

The Labor Department's latest report revealed that the adjusted non-farm payrolls for August increased by just 142,000, against an expectation of 160,000, and the previous month's figure was revised downward from 114,000 to 89,000. The unemployment rate dipped to 4.2%, marking a decline for the first time in five months.

Federal Reserve Governor Christopher Waller expressed support for more aggressive rate cuts if necessary, suggesting that current economic data indicates the Fed no longer needs to exercise patience and should instead take decisive action

Advertisements

Similarly, Fed member Philip Jefferson highlighted that long-term indicators suggest significant declines in inflation, with the speed of rising unemployment surpassing expectations from June, supporting the case for multiple rate cuts.

The Federal Reserve is set to convene on September 17-18 for its next policy meeting, and market expectations lean heavily towards a rate cutThe ongoing discussions underline a crucial choice: whether to adopt a conventional 25 basis points reduction or pursue a more substantial 50 basis points cut.

As a reflection of the turbulent climate, technology stocks fell across the boardThe Bloomberg American Technology Index dipped by 2.9%, with Tesla down 8.45%, Apple down 0.7%, Amazon declining by 3.65%, Netflix slipping by 2.61%, Google falling by 4.02%, Facebook down 3.21%, and Microsoft decreasing by 1.64%.

In an important announcement on Thursday, Tesla unveiled its plans for its FSD technology launch in China and Europe in the first quarter of the coming year, contingent upon awaiting approval from regulatory authorities

Advertisements

Tesla representatives confirmed that the news is accurate and they are currently in the process of obtaining the necessary permits.

On another front, the UK’s Competition and Markets Authority announced on September 6 that it has preliminarily found that Google abused its dominant position through its ad servers and purchasing tools, which has limited market competitionThis development is part of a broader inquiry into how Google promotes its advertising trading platform, essentially damaging competition and impacting advertisers and publishers alikeSimilar investigations are concurrently taking place in the U.Sand EU.

Chip stocks also experienced a significant downturn during this volatile weekMajor players saw declines: Broadcom fell by 10.36%, ASML by 5.38%, TSMC by 4.15%, Nvidia by 4.09%, AMD by 3.65%, Micron Technology by 3.37%, Qualcomm by 3.37%, and Intel by 2.63%.

In regulatory news, the Dutch government announced the expansion of its export controls on advanced semiconductor equipment, requiring ASML to apply for licenses from The Hague, rather than from the U.S

• Reforms Targeting Tech Independence and Strength
• Impact of Federal Reserve Rate Cuts
• Energy Price Fluctuations and Forex Market Ties
• Surge in Gold and Oil Prices
• The Rise of Sustainable Investment in Financial Markets

government, for specific machines beginning on September 7, 2024. ASML stated that these new export regulations would not adversely impact its profitability, as the Dutch Trade Minister insisted that each export license application would be evaluated individually to minimize disruptions within the supply chain.

As for crude oil prices, WTI futures for October delivery fell sharply by $1.48, closing the week down 2.1% at $67.67 per barrel, reaching a close not seen since June 2023. During the session, WTI crude even dipped to $67.17 per barrel, marking the largest weekly decline in October 2023. This decline has also affected energy stocks, with ExxonMobil down by 0.42%, Chevron down 1.7%, ConocoPhillips down 1.3%, Schlumberger down 1.44%, and Occidental Petroleum falling 3.19%.

The downward pressure on oil prices is attributed primarily to supply-demand dynamics and broader economic expectations