The market fell sharply on Friday—with the Dow plunging up to 600 points—before paring back losses late in the afternoon, as investors rotated out of tech and back into stocks that would benefit from a reopening of the economy.
The Dow Jones Industrial Average finished down 0.6%, over 150 points, on Friday, while the S&P 500 fell 0.8% and the tech-heavy Nasdaq Composite lost 1.3%.
Stocks initially opened higher after the release of a solid August jobs report: The U.S. added 1.4 million jobs last month and the unemployment rate fell to 8.4%, according to the Labor Department.
The market quickly turned negative, however, as tech stocks remained under pressure following their steep sell-off on Thursday: Facebook, Amazon, Microsoft and Google-parent Alphabet were all down again on Friday.
At the market’s low point on Friday, the Dow fell by as much as 628 points, while the S&P 500 and Nasdaq plunged over 3% and 5%, respectively.
Stocks rebounded late in the afternoon, however, as some investors appeared to buy the dip in beaten-down parts of the market.
While there was a continued rotation out of tech stocks, shares of companies that would benefit from a reopening of the economy—including banks, cruise operators, airlines and some retailers—led the comeback on Friday.
Shares of both Apple and Tesla, which plunged by over 8% in the previous session, moved slightly higher on Friday—after both companies completed stock splits earlier this week.
“Today’s [jobs] report is another sign that the recovery in the labor market is nearing the point of exhaustion and should signal to lawmakers that another round of fiscal stimulus will be needed to keep the economic recovery on track,” says Charlie Ripley, senior investment strategist for Allianz Investment Management.
Friday’s volatile session follows a sharp sell-off on Wall Street: The market tanked on Thursday, posting its worst day since June as stocks retreated from record highs and tech shares plunged. The Dow slid 2.8%—more than 800 points, while the S&P fell 3.5% and the Nasdaq dropped 5%. Shares of Big Tech companies, which have been instrumental in leading the market’s rebound over the past few months, dragged the market lower on Thursday as the tech sector had its worst day since March. Before Thursday’s sell-off, stocks had made a strong start to September, despite it being a historically bad month for markets.
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