NEW YORK — Wall Street is losing ground on Monday at the start of a week full of economic reports that could drive where interest rates, and thus stock prices, go.
The S&P 500 fell 0.3% in afternoon trading, coming off its first losing week in the last three. The Dow Jones Industrial Average was down 137 points, or 0.3%, as of 12:55 p.m. Eastern time, and the Nasdaq composite was 0.5% lower.
Technology stocks, including companies in the artificial-intelligence industry, were among the heaviest weights on the market following their scary swings last week.
Nvidia, the chip company that’s become the face of the AI boom, rose 1.7%. It was one of the strongest forces pushing upward on the S&P 500 and cushioning some of the impact from losses elsewhere on Monday after dropping 4.1% last week.
Oracle sank another 1.9% following its 12.7% tumble last week, which was its worst in more than seven years. Broadcom fell 5.1%.
AI stocks have been shaky on worries that all the billions of dollars flowing into chips and data centers may not produce a big-enough payoff of profits and productivity to make it worth it. The doubts are causing cracks for the industry, whose earlier surges was the main driver for the U.S. market's rally to records.
Besides AI, the main focus on Wall Street this week will be what several big updates on the U.S. economy’s health say.
On Tuesday will come the jobs report for November, and economists expect it to show employers added 40,000 more jobs than they cut during the month. Thursday will bring an update on the inflation that U.S. consumers are feeling, and economists expect it to show inflation was at 3.1% last month, still higher than households and policymakers would like.
Such data is under the microscope because the Federal Reserve is trying to figure out if a slowing job market or high inflation is the bigger problem for the economy. The Fed is in a potentially tough spot because fixing one of those problems by moving interest rates would likely worsen the other in the short term.
The hope on Wall Street is that the job market weakens, but only by a little: enough to get the Fed to lower interest rates but not so much that a recession swamps the economy. Wall Street loves lower rates because they can give the economy and prices for investments a boost, even if they also may worsen inflation.
“With the Fed still appearing to be more focused on labor-market weakness than inflation, we’re likely facing a ‘bad news is good’ scenario for the jobs report,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
“As long as the numbers don’t suggest employment is falling off a cliff,” that would mean the market would likely welcome soft numbers, he said.
The spotlight will be brightest on the unemployment rate, not the overall job growth numbers, because the latter is feeling downward pressure from a drop-off in immigrant workers. Economists expect Tuesday’s report to show the unemployment rate at 4.4%, which would keep it near its highest and worst level since 2021.
Treasury yields eased in the bond market ahead of the updates. A report earlier on Monday morning also said that a measure of manufacturing strength in New York state unexpectedly weakened, when economists expected to see continued growth.
The yield on the 10-year Treasury fell to 4.18% from 4.19% late Friday.
Elsewhere on Wall Street, shares of iRobot tumbled 72.6% after the maker of Roomba vacuums said holders of its stock will likely face a total loss after it filed for Chapter 11 bankruptcy protection over the weekend. The company has reached an agreement with its primary contract manufacturer, Picea, to buy it through a process supervised by a U.S. bankruptcy court.
In stock markets abroad, indexes rose in Europe following weaker finishes in Asia.
Indexes fell 1.3% in Hong Kong and 0.6% in Shanghai after the Chinese government reported a drop in investment in factory equipment, infrastructure and other fixed assets. It’s the latest signal that demand in the world’s second-largest economy remains weak.
Japan’s Nikkei 225 sank 1.3% after a quarterly survey of big manufacturers by the central bank showed a slight improvement in sentiment. That could encourage the Bank of Japan to go ahead with a hike to interest rates.
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AP Business Writer Elaine Kurtenbach contributed.
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