Major stock averages drop for the third week, Nasdaq records a six-day losing streak

US stocks fell on Friday to cap the third consecutive weekly decline, after a strong August jobs report failed to allay fears that the Federal Reserve will continue to aggressively raise interest rates to fight inflation.

After rising during the morning, the Dow Jones Industrial Average erased its gains of 370 points and ended the session lower by 337.98 points, or about 1.1%, at 3,1318.44. The S&P 500 fell about 1.1% to 3,924.26, its lowest closing level since July. The Nasdaq Composite fell 1.3% to 11,630.86, marking its first six-day losing streak since 2019.

All major averages were lower by the end of the week, making it the third consecutive negative week after pulling back in the last days of August. The Dow and S&P lost nearly 3% and 3.3%, respectively, while the Nasdaq fell 4.2%.

“There is still a lot of nervousness about what we will see over the next few months,” said Kaley Cox, US investment analyst at eToro. “Yes, the equilibrium is due to inflation and the labor market, but at what cost? Markets are still realizing that.”

“To make matters worse, the S&P 500 is trapped in the danger zone – below its three large moving averages,” she added. “These moving averages were floors until a few weeks ago. Now, they seem to be ceilings the indicator can’t break. The mood has definitely changed. While we may not test selling lows again, we may not hit new highs anytime soon. “.

Stocks have been under pressure this week due to hawkish comments from Federal Reserve officials suggesting that rate hikes will not fade any time soon. This puts traders under surveillance to get Retest June lowsEspecially knowing that September has historically been a weak month for the market. some you have a suggestion That if the S&P 500 fails to sustain the 3900 level, those summer lows may come back into play.

Some investors were briefly relieved on Friday by the highly anticipated jobs report, which showed the economy Added 315,000 jobs For the month, a little less Dow Jones’ rating of 318,000. Stocks rose in the early part of the day.

The unemployment rate rose to 3.7%, a tenth of a percentage point higher than expectations. The August report is particularly important because it is one of the last major economic reports that the Federal Reserve will evaluate before it raises interest rates at its September meeting. This data point can help the central bank determine whether to raise by 75 basis points.

The last important economic report is the August CPI on September 13th and likely to be determined How aggressive the Fed should be in the near term.