Stock market today: Wall Street pulls away from its record as technology stocks slump

NEW YORK (AP) — Wall Street plunged from its record high on Friday after Nvidia, one of its most influential stocks, suddenly gave up some of its meteoric gains.

The S&P 500 fell 0.7% in afternoon trading, following a record close. The Dow Jones Industrial Average was down 55 points, or 0.1%, as of 1:46 p.m. ET, and the Nasdaq composite was down 1.2%.

Treasury yields fell in the bond market immediately after the release of a jobs report that economists called "all over the place." It showed that employers hired more workers last month than economists expected, but workers' wages rose less than expected. He also said job growth in January was not as strong as previously thought.

The labor market and the economy in general are in a delicate situation, and Wall Street wants them to continue growing, but not so much as to increase pressure on inflation.

The ultimate goal is for inflation to cool enough to convince the Federal Reserve to reduce its main interest rate from its highest level since 2001. Such a move would relieve pressure on the financial system and the economy, which until now has been has kept us out of a recession. despite high interest rates.

"Big picture: These were helpful numbers for the Fed to gain confidence," said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management.

Following the report, bets rose on Wall Street that the Federal Reserve will likely start cutting in June. The two-year Treasury yield, which tracks the Federal Reserve's expectations, fell to 4.47% from 4.51% late Thursday.

The yield on the 10-year Treasury bond, which also focuses on long-term economic growth, also plunged immediately after the report, although it halted its decline later in the morning.

Wall Street loves lower interest rates because they encourage people and businesses to borrow, which can strengthen the economy, and because they boost the prices of stocks and other investments.

"Things are good, but not great, and they're getting a little worse," Brian Jacobsen, chief economist at Annex Wealth Management, said of the jobs report. "Payroll gains are still fantastic, but we are not as strong as we thought when previous months' numbers were revised downwards."

Federal Reserve Chairman Jerome Powell He said a day earlier that the central bank “is not far” from cutting interest rates. It just needs additional data to confirm that inflation is heading sustainably towards its 2% target.

Meanwhile, the hope on Wall Street is that the remarkably resilient economy will boost corporate profit growth.

Gap rose 3.4% after the retailer reported higher earnings and revenue for the latest quarter than analysts expected. The retailer said a major sales trend returned to growth at its Old Navy and Gap stores. The owner of Banana Republic and Athleta also gave a sales forecast for this year slightly higher than analysts' estimates.

Gun maker Smith & Wesson Brands jumped 26.2% after also reporting higher-than-expected profits for the latest quarter. He said his shipments grew faster than the overall firearms market.

Earlier in the day, Nvidia stock was once again leading the S&P 500 higher, as has become almost routine. But the index's momentum slowed later in the morning as Nvidia faded.

It's an unusual drop for the company, which has skyrocketed to become one of the most influential on Wall Street after tripling last year. It fell 6% on Friday, but is still up 76% so far this year.

Also losing out was Broadcom, which fell despite reporting better-than-expected results. It fell 6.3% after giving a revenue forecast for next year slightly below analysts' expectations.

Costco Wholesale sank 7.2% after its fourth-quarter revenue missed forecasts.

In foreign stock markets, indices were mixed in Europe and rose modestly in much of Asia. South Korea stood out as the Kospi rose 1.2%.

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AP Business writers Matt Ott and Yuri Kageyama contributed.

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