NEW YORK (AP).— Wall Street recorded a day of heavy losses, led by the technology sector, while bitcoin deepened its correction and Treasury bond yields fell amid signs of weakness in the United States labor market.
The S&P 500 index fell 1.2% and accumulated its sixth negative session in the last seven days, after having recently reached an all-time high. The Dow Jones Industrial Average also lost 1.2%, and the Nasdaq composite fell 1.6%.
The pressure was concentrated on technology stocks. Qualcomm plummeted 8.5%, one of the biggest declines in the market, despite exceeding earnings and revenue forecasts in its latest quarter.
The chip company reported that its forecast for the current quarter came in lower than expected, due to a widespread memory shortage that has led some smartphone makers to reduce orders.
In the bond market, yields fell after a larger-than-expected increase in U.S. jobless claims was reported, which could signal an acceleration in the pace of layoffs.
Although some economists considered that the weekly increase could be due to statistical noise, an independent report showed that layoffs announced by companies based in the United States totaled 108,435 last month, the highest number since October, according to Challenger, Gray & Christmas.
For the month of January, this is the worst record since 2009, during the Great Recession. Added to this was an official report that indicated that job vacancies in December were the lowest in more than five years.
Labor market weakness could lead the Federal Reserve to consider interest rate cuts to support the economy, even at the risk of putting pressure on inflation.
The yield on the 10-year Treasury bond fell from 4.29% to 4.19%, a relevant movement for the debt market. In parallel, raw materials recorded steeper falls.
In this context of greater caution, analysts pointed out that financial markets are adjusting valuations after a prolonged period of increases, driven largely by enthusiasm around artificial intelligence, global liquidity and the search for alternative assets. The combination of weaker jobs data, mixed corporate results and elevated prices has increased volatility, leading investors to reduce exposure to technology stocks, cryptocurrencies and metals as they assess whether the U.S. economy is headed for a sharper slowdown.
Precipitous falls
Silver lost 9.1% since its recent rally stopped, while gold lost 1.2% and closed at $4,889.50 per ounce, after having touched $5,600 last week.
Bitcoin also sank. The cryptocurrency fell more than 12%, below $64,000, about half of its record above $124,000 set in October, dragging down companies in the sector such as Coinbase Global and Strategy.
Stock markets under pressure
Cryptocurrencies and metals fall reflect investor caution in the face of mixed signals.
American stock market
Wall Street stocks fell across the board, with particular pressure on the technology sector. Investors reacted to corporate results, weaker forecasts and the perception that the stock market is elevated.
Work signs
Recent reports showed an increase in unemployment claims, more layoffs announced and fewer vacancies available. These indicators fueled the expectation of an economic cooling and reinforced attention on the Federal Reserve’s decisions.
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