At midday on Wednesday, US stocks traded lower, with the technology sector leading the declines. AI-related stocks faced broad pressure as investors assessed the latest US economic data.
The Dow Jones Industrial Average fell 114.05 points, or 0.24%, to 48,000.21. The Nasdaq Composite dropped 286.56 points, or 1.24%, to 22,824.91, while the S&P 500 declined 52.60 points, or 0.77%, to 6,747.66.
Semiconductor stocks were broadly weaker during midday trading.
Earlier on Tuesday, the US Bureau of Labor Statistics released the November jobs report, which also included revised October data. The report provided a clearer picture of the US economic health after federal data backlog caused by the government shutdown this fall.
The data showed the US economy lost 105,000 jobs in October, pushing the unemployment rate up to 4.6%—the highest level since September 2021. However, November saw a gain of 64,000 nonfarm payrolls, exceeding the Dow Jones survey consensus estimate of 45,000.
Following the report's release, the S&P 500 fell 0.2% on Tuesday, while the Dow lost 0.6%, marking their third consecutive day of declines.
Oil prices tumbled more than 2.7%, with US WTI crude hitting its lowest level since 2021 amid oversupply concerns, dragging energy stocks lower. Shares of major oil companies ExxonMobil and Chevron fell sharply on Tuesday.
Bob Elliott, CEO of Unlimited Funds, commented: "The economy has been slowing for some time, and markets had high hopes... but with this data, those hopes have largely evaporated. This might not be the time to overweight equities but rather to consider adding some fixed income exposure as we approach year-end."
Traders are also awaiting Thursday's release of November consumer price index (CPI) data.
Cooling Jobs Data Temporarily Eases Rate Cut Bets The latest US labor market data showed employment is cooling but not deteriorating rapidly, prompting traders to pause increasing bets on near-term rate cuts. November's job additions of 64,000 exceeded Reuters' economist forecasts, though the unemployment rate rose to 4.6%. However, the 43-day government shutdown distorted the figures.
As a result, markets and analysts remain uncertain whether the jobs report materially alters the policy outlook. Attention has now shifted to Thursday's inflation data to determine if policy expectations will change during the year's last full trading week.
Kieran Williams, Head of Asia FX at InTouch Capital Markets, noted: "The jobs data is severely distorted and nearly useless for January decision-making. With such poor signal-to-noise ratio, it's challenging for the Fed to calibrate policy based on this."
He added that policymakers need cleaner Q1 data to "validate the pace of deterioration, which suggests March or April may be prudent benchmarks for restarting rate cuts."
Andrea Gabellone, Global Head of Equities at KBC Global Services, said: "Yesterday's US jobs data largely confirmed existing rate path expectations rather than acting as a new catalyst. While the data remains volatile, overall, I don't see the Fed rushing to cut rates earlier or more aggressively."
Post-data, traders still expect two Fed rate cuts totaling about 50 basis points by 2026, likely completed by September next year at the latest.
Thomas Mathews, Head of Asia-Pacific Markets at Capital Economics, stated: "If CPI later this week meets expectations, the Fed certainly won't feel pressure to cut in upcoming meetings. Even March might still be too early."
Fed's Waller Supports Gradual Rate Cuts Federal Reserve Governor Christopher Waller expressed support for further rate cuts on Wednesday to return to neutral levels but cautioned against moving too quickly.
Waller noted that with inflation projected to gradually slow through 2026, current policy rates remain up to 100 basis points above neutral—the level where the Fed neither restrains growth nor fuels inflation.
"There's no need to rush as inflation remains elevated. We can proceed steadily toward neutral," said Waller in his first remarks since last week's Fed rate cut. Considered a leading candidate for next Fed chair, Waller is expected to interview with the US President later Wednesday.
When asked about the potential nomination, Waller quipped that he'd heard the same rumors. He pledged to defend Fed independence against any political pressure from the White House, citing his two decades of research on central bank independence.