Stocks Hit by Tech Rout as Bonds Climb on Jobs Day: Markets Wrap

(Bloomberg) — Stocks got hit by a tech selloff, while bonds climbed in a volatile session after a mixed jobs report left traders wondering whether or not the Federal Reserve will deploy a super-sized rate cut in September.

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Wall Street bets on a half point Fed reduction this month faded again — after briefly gaining momentum when Fed Governor Christopher Waller said he’s “open-minded” about the potential for a bigger rate cut. All around trading desks, the prevailing view is that the labor market is indeed softening — but it’s not weak enough to warrant an aggressive move from officials at this point.

In theory, that would tend to be “good news” for equities given that the Fed may not need to rush. However, the mixed jobs figures came on a day when the S&P 500’s most influential group — technology — is under heavy pressure thanks in part to a weak outlook from Broadcom Inc.

“Financial markets have turned attention their attention toward how much the Fed will ease and how fast the economy is slowing,” Scott Wren at Wells Fargo Investment Institute. “Expect the near-term volatility to continue.”

The S&P 500 fell 1.7%. The Nasdaq 100 sank 2.7%. The Dow Jones Industrial Average dropped 0.9%. The yield on 10-year Treasuries declined four basis points to 3.69%

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