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Tech Stocks Tumble, Indexes Hit 1-Month Lows
20 Nov
Summary
- Major US stock indexes fell to one-month lows amid tech sector weakness.
- Home Depot's reduced earnings guidance impacted consumer spending outlook.
- Signs of labor market cooling lowered Treasury yields and Fed rate cut hopes.
US stock indexes continued their downward trend, with the S&P 500, Dow Jones Industrial Average, and Nasdaq 100 all hitting one-month lows. The technology sector was a significant drag, with major players like Amazon.com and Microsoft experiencing declines following downgrades from Rothschild & Co Redburn. Adding to the market's woes, Home Depot's shares dropped more than 3% after the company revised its full-year earnings guidance downward, signaling concerns about consumer spending on big-ticket home improvement items.
Despite the broad market weakness, there were indications of support stemming from a cooling US labor market. ADP reported a slight job shedding, which led to a decrease in Treasury note yields. This development bolstered the outlook for the Federal Reserve to maintain its current stance on interest rates. Initial unemployment claims also showed a slight increase, while continuing claims rose to a two-month high, further suggesting labor market moderation.
