Wall Street Worries Fed Missed Its Window

Dow fall nearly 500 points on weak economic data
By Newser Editors and Wire Services
Posted Aug 1, 2024 3:25 PM CDT
Stocks Falter on 'Winds of Recession'
A pair of traders work at the post of specialist James Denaro, right, on the floor of the New York Stock Exchange, Wednesday, July 31, 2024.   (AP Photo/Richard Drew)

US stocks tumbled on Thursday after weak data raised worries the Federal Reserve may have missed its window to cut interest rates before undercutting the economy's growth, per the AP:

  • The Dow fell 494 points, or 1.2%, to 40,347.
  • The S&P 500 fell 75 points, or 1.3%, to 5,446.
  • The Nasdaq fell 405 points, or 2.3%, to 17,194.
  • The action was even stronger in the bond market, where the yield on the 10-year Treasury yield tumbled below 4%, back to where it was in February.

Weak data on US manufacturing ended an early rally, and that was followed by another report showing that the number of US workers applying for jobless benefits hit its highest level in a year. The data raised worries that the economy could buckle under the accumulated weight of rates that the Fed has been holding at a two-decade high for roughly a year. The S&P 500 would have dropped even more Thursday if not for Meta Platforms and other stocks that reported better results for the spring than expected. Meta, the company behind Facebook and Instagram, rose 4% after reporting profit and revenue that topped analysts' forecasts.

"The economic data keep rolling on in the direction of a downturn, if not recession, this morning," Chris Rupkey of FWDBONDS tells CNBC. "The stock market doesn't know whether to laugh or cry because while three Fed rate cuts may be coming this year and 10-year bond yields are falling below 4%, the winds of recession are coming in hard." (More stock market stories.)

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