US equity indexes dropped this week as a trio of weak jobs reports sparked volatility, pushing government bond yields sharply lower amid concern the economy is deteriorating.
* The Dow Jones Industrial Average ended at 40,345.41 on Friday, compared with 41,563.08 a week ago. The Nasdaq Composite closed at 16,690.83, versus 17,713.62 a week prior. The S&P 500 closed at 5,408.42, compared with 5,648.38 a week earlier.
* Consumer defensive, real estate, and utilities topped the sector charts while technology led the decliners. The mega-cap technology and communication services stocks such as ASML Holding (ASML), Nvidia (NVDA), and Broadcom (AVGO) sank more than 12%, and Alphabet (GOOG, GOOGL) closed about 6.6% lower.
* Jobs data signaled weakness in the economy. August nonfarm payrolls gains on Friday missed forecast amid downward revisions to June and July. Private payrolls reported Thursday rose less than forecast, also for August, based on ADP Institute's employment report. On Wednesday, US job openings unexpectedly fell in July.
* "Determining the pace of rate cuts and ultimately the total reduction in the policy rate are decisions that lie in the future," Federal Reserve Governor Christopher Waller said Friday. "As of today, I believe it is important to start the rate-cutting process at our next meeting. If subsequent data show a significant deterioration in the labor market, the FOMC can act quickly and forcefully to adjust monetary policy."
* The CBOE's Volatility Index, the fear index, traded up to 22.11 late on Friday, surging from around 15 a week ago.
* The 10- and two-year Treasury yields touched their respective 52-week lows on Friday while sinking from a week ago. The two-year yield fell below that of the 10-year as weaker-than-anticipated job openings bolstered bets for interest-rate cuts.
* The probability of a 25 basis-point cut on Sept. 18 stood at 69%, according to the CME Group's FedWatch Tool. The remaining 31% likelihood was for a 50 basis-point drop.
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