Wall Street tumbles as markets wait for Fed move

STORY: U.S. stocks fell on Friday weighed down by a jobs report that left traders uncertain about how far the Federal Reserve will go in cutting interest rates.

The Dow dropped one percent, the S&P 500 shed about one-and-three-quarters percent and the Nasdaq plunged more than two-and-a-half percent to register its biggest weekly percentage drop since January 2022.

U.S. Labor Department data showed employers added 142,000 jobs in August, less than analyst expectations.

The report means the Federal Reserve will likely cut rates later this month.

But it may also suggest a narrower chance the economy achieves a soft landing, said Kevin Mahn, chief investment officer at Hennion & Walsh Asset Management.

"If you look at the Federal Reserve, they are data dependent, right? So by definition, that means they're going to be backward looking and late to the party. Once again, we're finding out that they're late to the party if in fact they cut by 50 basis points or more in their September meeting. I think that sends an alarming message to investors that this economic slowdown has now gotten much ahead of what the Fed anticipated and could lead into a potential recession."

Dragging the indexes down Friday... the so-called Magnificent Seven megacap tech stocks, all of which lost ground.

Tesla slumped nearly eight-and-a-half percent, while Alphabet and Nvidia both fell 4%.

The selloff spread to other chip stocks, including Broadcom, which sank almost ten-and-a-half percent after forecasting fourth-quarter revenue slightly below estimates.

:: Marvell handout

Marvell Technology dropped more than 5% and Advanced Micro Devices shed 3.7%.

As a result, the Philadelphia Semiconductor index finished lower by 4.5%, logging its biggest weekly drop since March 2020.