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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.
Looking ahead, market participants are anticipating Nvidia's upcoming earnings report for insights into the artificial intelligence sector's trajectory. Additionally, earnings from retail giants Walmart and Target will offer crucial information on the health of overall consumer spending. The economic calendar for the week remains packed with delayed reports, including FOMC meeting minutes, unemployment data, and consumer sentiment indices, which will shape market expectations.
