Nasdaq slides for fifth day as Dow ticks higher after latest batch of labor-market data

What’s driving markets

The S&P 500 has lost 1.4% and the Nasdaq Composite 2.8% in just the first two sessions of 2024 as investors appear to be taking some profits following a sharp rally at the end of last year.

Heightened Middle East tensions, concerns that stocks and bonds have become overbought, and worries that the Federal Reserve may not reduce borrowing costs as quickly as investors had hoped, were all seen contributing to the selloff.

Indeed, minutes from the Fed’s December meeting released Wednesday showed officials welcomed the waning of inflation of late but still saw interest rates likely staying high for longer than traders were pricing in.

“The beginning of 2024 has seen a slight recalibration of market-based interest rate cut expectations, lingering geopolitical concerns, position adjustments ahead of U.S. labor statistics, and a flurry of corporate debt issues raising supply concerns, all contributing to a subdued start to the year in financial markets,” said Stephen Innes, managing partner at SPI Asset Management.

Equity bulls will be hoping that data continues to show economic activity slowing to the extent that it helps the Fed achieve its 2% inflation target, but not by so much that it indicates a contraction that would badly hit corporate earnings.

Investors will also soon receive a flurry of corporate earnings reports starting next week.

But more immediately in focus is the U.S. labor market, with the Labor Department’s nonfarm payrolls report, its marquee job-market report, due Friday. Investors have already received several other labor-market reports this week.

On Thursday, private payrolls data from ADP showed U.S. businesses added a solid 164,0,000 new jobs in December.

See: ADP jobs report finds 164,000 new workers hired in December

Meanwhile, U.S. government data showed the number of Americans who applied for unemployment benefits in the final week of 2023 fell to a nearly three-month low of 202,000.

See: Jobless claims drop to nearly three-month low of 202,000

A report on job openings released earlier in the week showed the number of open positions had fallen to a 32-month low of 8.8 million as of November, the latest data available.

Outside of the stock market, crude-oil prices continued to climb on Thursday as concerns mounted about a possible interruption to supplies from the Middle East. U.S.-traded West Texas Intermediate crude futures
CL00,
-0.10%

CL.1,
-0.10%
for February delivery were up 1% at $73.41 a barrel.

Companies in focus

• Amazon.com Inc.
  AMZN,
  -1.56%
  shares were down 2.5%, helping to weigh on the Nasdaq

• Shares of Mobileye Global Inc.
  MBLY,
  -23.55%
  slumped after the creator of self-driving technology issued a revenue warning.