The markets closed out the week lower as investors returned from summer vacation in profit-taking mode. The Dow 30 was lower on the day by 79, the S&P 500 closed down 6, and the Nasdaq 100, which had a tough week, closed lower by 20. President Trump also commented that he was ready for yet another $267 billion in tariffs on Chinese goods.
Bonds soared today on fears that higher wages and jobs would cause the Fed to raise rates more rapidly. The 2-year treasury note rose to 2.941, its highest level in 10 years. While the Fed is almost certainly going to raise rates later this month, some investors are starting to assume a December rate hike is more likely.
Home builders struggled over the employment report, which pushed rates higher. Stocks like Pulte Homes (PHM ), Lennar (LEN ), and D.R. Horton (DHI ) all sold off over 2% on the day. Fears of faster rate hikes and concerns of a slowing housing market are both contributing to their list of problems lately. Rising costs, and labor have been a focus in this sector.
Semiconductor stocks saw a small rebound today after yesterday's sell off. Names like Nvidia (NVDA ) and Micron (MU ) saw modest gains, along with others in the sector.
Shares of Tesla (TSLA ) continued their rapid sell off today as the focus turned back to the CEO and his lack of good choices. Elon Musk was recorded on a podcast smoking pot and drinking alcohol. It was also reported that top executives resigned, which initially sent shares lower by 10%. As of now the company is losing its HR chief, its chief accounting officer, and its vice president of communications. Given the short term extension, technical traders did come in to buy the dip and shares closed well off their lows.
Broadcom (AVGO ) shares were higher by 8% today as the company reported earnings that easily beat expectations. Revenue was as expected and the chip maker said that the beat was largely due to "demand for data center-related products." The move today erases over one month of losses.