Today, the Dow Jones (DJIA) fell by over 1%, or 435 points. The index had recorded new highs last Friday. Most market participants expected the decline because they had closed their winning positions early before key US data.
Market participants expect the non-farm payrolls (NFP) data to be available on Friday. The jobs report could decide the percentage by which the Fed will lower interest rates. The Fed might only make small rate cuts if the job numbers are substantial. However, if the job numbers are weak, the Fed might have to cut rates more sharply to help create jobs and boost the economy.
The latest U.S. manufacturing data, which showed a slight improvement, wasn’t enough to stop the Dow’s decline. The manufacturing PMI (Purchasing Managers’ Index) came in at 47.2%, slightly better than July’s 46.8%, showing that the economy has been growing for 52 months straight since it shrank in April 2020.
However, the drop in the Dow could also be linked to the bad news from China, where manufacturing data was disappointing. China’s PMI fell by 0.3% in August to 49.1%, missing forecasts of 49.4%, which added to the negative mood among investors.
Read more about the Dow Jones here.
This post was last modified on Sep 03, 2024, 17:27 BST 17:27