The artificial-intelligence frenzy that powered the recent market rally continued to take a breather, leaving stock traders with little encouragement to make any big bets on the eve of the all-important jobs report.
(Bloomberg) — The artificial-intelligence frenzy that powered the recent market rally continued to take a breather, leaving stock traders with little encouragement to make any big bets on the eve of the all-important jobs report.
Equities kicked off the month in a very tight range, with the S&P 500 stuck near its key 4,200 level. C3.ai Inc. plunged 20% as the AI software company’s sales outlook did not live up to the investor enthusiasm that has seen its stock price more than triple this year.
“When a stock — or group of stocks — rally in a colossal fashion over a short period of time, one should expect to see some very significant pullbacks along they way,” said Matt Maley, chief market strategist at Miller Tabak. “Sometimes, the deep corrections are long-lasting, like we saw after the dot-com bubble burst. Sometimes, they only last for a few weeks, and are followed by new, very strong rallies that take the stocks even higher.”
Employment growth at US companies last month exceeded all projections, highlighting a durable labor market that continues to buttress the economy. The monthly jobs report on Friday, which includes government payrolls, will provide further insight into the direction the labor market is headed. Forecasters project the government’s report to show a moderation in the pace of hiring.
The House passed debt-limit legislation forged by President Joe Biden and Speaker Kevin McCarthy that would impose restraints on government spending through the 2024 election and avert a destabilizing US default. Lawmakers from both parties joined to approve the bill Wednesday evening, sending the measure to the Senate for consideration.
In other corporate news, Macy’s Inc. dropped after cutting its earnings outlook. Salesforce Inc. fell after the software company gave a lackluster forecast for sales. Dollar General Corp. slumped after the discount retailer slashed its annual profit forecast. Nordstrom Inc. gained after the department-store chain’s quarterly revenue and profit came in slightly ahead of estimates.
Some of the main moves in markets:
Stocks
- The S&P 500 was little changed as of 9:31 a.m. New York time
- The Nasdaq 100 rose 0.1%
- The Dow Jones Industrial Average fell 0.4%
- The Stoxx Europe 600 rose 0.4%
- The MSCI World index rose 0.3%
Currencies
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro rose 0.2% to $1.0713
- The British pound rose 0.3% to $1.2484
- The Japanese yen rose 0.2% to 139.06 per dollar
Cryptocurrencies
- Bitcoin fell 0.7% to $26,916.04
- Ether fell 0.2% to $1,862.71
Bonds
- The yield on 10-year Treasuries declined five basis points to 3.59%
- Germany’s 10-year yield declined three basis points to 2.25%
- Britain’s 10-year yield declined eight basis points to 4.11%
Commodities
- West Texas Intermediate crude fell 0.1% to $68.01 a barrel
- Gold futures rose 0.2% to $1,985.80 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Emily Graffeo.
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