Stocks Now Take A Massive Hit Ignited By Recession Fears
Stocks now take a massive hit ignited by recession fears following the release of a weaker-than-anticipated jobs report for July.
The stock market experienced a sharp decline on Friday, with the S&P 500 headed for its worst session in around two years.
This sell-off was triggered by a much weaker-than-expected jobs report for July, which ignited concerns that the economy could be entering a recession.
Specifically:
- The S&P 500 index dropped 2.2%.
- The Nasdaq Composite lost 2.6%.
- The Dow Jones Industrial Average fell 820 points, or 2%.
This sell-off pushed the Nasdaq into correction territory, down more than 10% from its all-time high set nearly a month ago.
The Nasdaq-100, which comprises the 100 largest companies in the Nasdaq Composite, was even deeper in a correction, trading 11% below its 52-week high.
The S&P 500 and Dow were also well off their respective all-time highs, down 6% and 4% respectively.
The weak jobs report for July raised concerns that the economy could be headed for a recession, triggering this broad-based sell-off across the major stock market indexes.
Specifically:
- Nonfarm payrolls grew by just 114,000 in July, slowing from 179,000 jobs added in June and below the expected 185,000.
- The unemployment rate increased to 4.3%, the highest level since October 2021.
This weaker-than-expected job growth data raised concerns about the health of the economy, leading to a broad sell-off in the stock market.
Some notable movers included:
- Amazon, which slid 12.5% after missing revenue estimates and issuing a disappointing forecast. This weighed on the consumer discretionary sector, which had its worst day since May 2022.
- Intel, which cratered 29% after announcing weak guidance and layoffs.
- Nvidia, which lost more than 5.5%, following a 6% drop the previous day.
As investors sought safety, the 10-year Treasury yield fell to its lowest level since December, closing at 3.82%.
The combination of the disappointing jobs report and concerns about the impact on major technology companies contributed to the sharp decline in the stock market on the day, per CNBC.
Also Read: Massive US Banks Now Prepare For Millions to Default
Other Market News Today
Citigroup has now had liquidity reporting errors in its latest scandal, due to repeatedly breaching a Federal Reserve rule.
Citigroup repeatedly breached a U.S. Federal Reserve rule that limits intercompany transactions, leading to errors in its internal liquidity reporting, according to a Citi document from December seen by Reuters.
Reuters is reporting the infractions for the first time.
Under so-called Regulation W, banks are required to restrict transactions like loans to the affiliates they control.
The rule is meant to protect depositors whose money is insured up to $250,000 by the government, the outlet reports.
The Regulation W infractions appear to be part of a broader set of problems Citigroup is working to address in its risk management and internal control systems.
In 2020, authorities deemed Citigroup’s risk practices to be “unsafe and unsound”.
Then in 2023, regulators rebuked the bank for how it was measuring risks related to its counterparties.
More recently, in 2024, regulators have continued to criticize Citigroup, this time focused on issues with the bank’s resolution planning.
As a result, Citigroup has now been hit with $136 million in fines for failing to make sufficient progress on regulatory compliance.
Overall, it seems Citigroup is grappling with significant deficiencies in its risk management, internal controls, and regulatory compliance.
The Regulation W infractions are just the latest in a series of regulatory actions against the bank as it struggles to remediate these underlying operational and governance problems.
The firm’s “subsequent reaction to the breaches resulted in liquidity reporting inaccuracies,” according to the document, which provides a 2023 year-end snapshot of some of Citi’s work on regulatory issues.
“We are fully committed to complying with laws and regulations and have a strong Regulation W framework in place to ensure prompt identification, escalation and remediation of issues in a timely manner,” a bank spokesperson said.
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Also Read: The US Treasury Direct is Now Freezing Customer Accounts
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