Wall Street indices drop after employment data release, Nasdaq falls by 1.2% with unemployment rising to 3.5%

First Republic falls as the bank announces it would stop dividends on preferred shares; semiconductor stocks rise; Samsung announces plans to reduce chip production

On Monday, US stock indices dropped due to rising concerns that the Federal Reserve, which is the central bank of the United States, would continue to hike interest rates. This comes after employment data released on Friday indicated that the labor market is holding up quite well. After the long weekend, the tech-heavy Nasdaq led the way for major indexes to close in the red, with growth companies such as Apple Inc. and Microsoft Corp. falling between 1.7% and 2.1%.

According to statistics released on Friday, employers in the United States kept up a robust hiring pace during the month of March. This drove the unemployment rate further lower, to 3.5%, and increased the likelihood that the Federal Reserve would raise interest rates once again the following month.


“Investors are still very optimistic that the (rate) increases will come to an end,” said Rick Meckler, partner at Cherry Lane Investments. “However, the data, which the Fed is so depen dent on, seems to leave room for at least a 25-basis point increase on more time,” he added. “The Fed is so dependent on the data that it seems to leave room for at least a 25-basis point increase on more time.”

Notwithstanding this, the probability of the Federal Reserve increasing interest rates by 25 basis points in May has increased to more than 65 percent as a consequence of the employment data that was released on Friday. The data on consumer and producer prices in the United States, the minutes from the Federal Reserve’s meeting in March, and the quarterly results from large banks in the United States such as JPMorgan Chase & Co., Citigroup Inc., and Wells Fargo & Co. will be the main topics of discussion this coming week.

According to estimates provided by Refinitiv, industry analysts anticipate that the earnings of S&P 500 businesses will decrease by 5.2% in the first quarter. This marks a significant turnaround from the 1.4% rise that was anticipated at the beginning of the year. At 9:41 a.m. Eastern Standard Time, the Dow Jones Industrial Average was trading lower by 84.51 points, or 0.25%, at 33,400.78, the S&P 500 was trading lower by 28.40 points, or 0.69%, at 4.076.62, and the Nasdaq Composite was trading lower by 146.94 points, or 1.2%, at 11,941.02; all three indices were down from their previous closing prices.

Consumer discretionary, technology, and communication services all saw losses of more than one percent as their respective indexes were among the eight main S&P sectors that were trading down. The electric car manufacturer Tesla slashed pricing in the United States by between 2% and almost 6%, a move that experts said might impact profitability. As a result, Tesla’s share price dropped by 4.2%.