US stocks fall after weaker than expected jobs data and Apple earnings

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Wall Street stocks notched their longest daily losing streak in three months, sliding on Friday as investors weighed weaker-than-expected US jobs growth and earnings from Big Tech “megacaps”.

The S&P 500 fell 0.5 per cent, reversing gains from earlier in the session. It shed 2.3 per cent for the week. The tech-focused Nasdaq Composite closed 0.4 per cent lower, falling 2.8 per cent across the five sessions.

The two indices had their fourth consecutive session of declines, their longest losing streaks since early May. On Monday, the S&P 500 notched a 3.1 per cent rise in July for its longest monthly winning streak in two years. But the benchmark slipped in subsequent days, largely against a backdrop of rising Treasury yields that prompted investors to reconsider the effect higher borrowing costs could have on risky assets.

The non-farm payrolls report released on Friday showed the US economy added 187,000 jobs in July, fewer than the 200,000 forecast of economists polled by Reuters.

“It does seem that the labour market is cooling, albeit slowly, which is just what the [Federal Reserve] will want to see,” said Neil Birrell, chief investment officer at Premier Miton Investors. “Overall, this increases the chances of rates being at their peak and the Fed pulling off the trick of getting inflation under control whilst keeping the economy strong.”

The jobs report also showed that average hourly earnings increased 4.4 per cent year on year in July, unchanged from the previous month and slightly above analysts’ expectations.

The US central bank last month raised its benchmark federal funds rate to a target range of between 5.25 per cent and 5.5 per cent, signalling that future tightening will be contingent on data.

Traders expect Fed policymakers will keep rates steady at their next meeting in September, according to data compiled by Refinitiv.

The yield on the policy-sensitive two-year US Treasury was down 0.1 percentage points to 4.8 per cent after the release of the data, while the yield on the benchmark 10-year note fell 0.16 percentage points to 4.04 per cent. Bond yields fall as prices rise.

The 10-year yield had hit a nine-month high on Thursday, propelled in part by the Treasury department’s announcement earlier this week that it would lift its issuance target for the coming quarter.

Investors on Friday also reacted to corporate earnings from “megacaps” Amazon and Apple, which reported results after Thursday’s closing bell.

Amazon gained 8.3 per cent, its biggest one-day jump since November, after reporting strong online sales during its second quarter. Apple shares sank 4.8 per cent, their biggest drop since late September, after reporting weak sales of iPhones and other hardware. The two companies account for almost 20 per cent of the Nasdaq 100’s market capitalisation.

Other large tech stocks, including Alphabet, Meta and Tesla, closed lower, though Microsoft added 0.3 per cent.

The US dollar, which tends to weaken when investors expect lower interest rates, lost 0.5 per cent against a basket of six peer currencies.

Oil prices rose after Saudi Arabia on Thursday said it would extend its production cut of 1mn barrels of oil a day for at least another month. International benchmark Brent crude settled 1.3 per cent higher at $86.24 a barrel, while US market West Texas Intermediate added 1.6 per cent to $82.82 a barrel.

In Europe, the region-wide Stoxx Europe 600 index ended the day 0.3 per cent higher, while France’s Cac 40 was up 0.8 per cent and Germany’s Dax rose 0.4 per cent.

In Asia, China’s benchmark CSI 300 gained 0.4 per cent and Hong Kong’s Hang Seng rose 0.6 per cent after the People’s Bank of China pledged to divert financial resources to the country’s struggling private sector. Japan’s Topix rose 0.3 per cent.