Wall Street: Nasdaq Falls 1.5%, Dragged Down by AMD’s Sharp Sell-Off
In other earnings-related moves, Eli Lilly shares surged 10.3% after the pharmaceutical company delivered an upbeat sales outlook.
Quick overview
- U.S. labor market data showed weaker-than-expected growth, with private-sector employment rising by only 22,000 jobs in January.
- Major Wall Street indexes closed mixed, with the Dow Jones up 0.5% while the S&P 500 and Nasdaq fell by 0.5% and 1.5%, respectively.
- Advanced Micro Devices (AMD) experienced a significant 17.3% drop in shares following disappointing earnings guidance, despite reporting record revenue.
- Eli Lilly's shares rose 10.3% after the company provided a positive sales outlook, driven by strong demand for its weight-loss drugs.
During the session, weaker-than-expected U.S. labor market data were released, while investors also awaited Google’s earnings report.
Major Wall Street indexes closed mixed on Wednesday, February 4. Technology stocks extended their decline, weighed down by a sharp post-earnings sell-off in chipmaker Advanced Micro Devices, Inc. (AMD).
At the same time, investors digested softer labor market indicators while looking ahead to the release of Alphabet’s (Google’s parent company) closely watched quarterly results after the closing bell.
In this context, the Dow Jones Industrial Average rose 0.5% to 49,500.90 points, the S&P 500 slipped 0.5% to 6,882.76, and the Nasdaq Composite fell 1.5% to 22,904.58.
ADP payrolls rise less than expected
Beyond corporate news, data released early in the session showed that U.S. private-sector employment increased less than expected in January, reflecting job losses in professional and business services as well as in manufacturing.
Payrolls rose by 22,000 jobs, following a downwardly revised gain of 37,000 in December, according to ADP’s National Employment Report. The figure came in well below the expected increase of 50,000.
A temporary government shutdown delayed the release of the highly anticipated monthly employment report until earlier this week, meaning ADP’s figures currently provide the clearest snapshot of labor market conditions in January.
Another indicator published during the day showed activity in the U.S. services sector—which accounts for more than two-thirds of national output—held steady in January. The Institute for Supply Management’s non-manufacturing PMI remained unchanged at 53.8, above consensus expectations. A reading above 50 typically signals expansion in the services sector.
Scott Bessent and support for a strong dollar
Treasury Secretary Scott Bessent underscored the importance of Federal Reserve independence for monetary policy during his testimony before the House Financial Services Committee on Wednesday.
He said the Fed must maintain a “very delicate balance” to fulfill its dual mandate, warning that when the central bank “moves into other areas, it affects its independence.” He also stated that the Fed “lost the public’s trust when inflation devastated the nation,” while reaffirming his belief in both the Fed’s independence and its accountability.
On financial regulation, Bessent cautioned against striving for a “zero-risk financial system,” while clarifying that he does not advocate “financial deregulation at any cost.”
Earnings in focus and standout Wall Street stocks
The AI-related segment of the market remained subdued on Wednesday, as shares of Advanced Micro Devices (AMD) plunged 17.3% after the company issued disappointing guidance, despite reporting record fourth-quarter revenue of $10.3 billion.
In other earnings-related moves, Eli Lilly shares surged 10.3% after the pharmaceutical company delivered an upbeat sales outlook for the year, driven by strong demand for its weight-loss drugs.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
- Read our latest reviews on: Avatrade, Exness, HFM and XM
Save