Sign InWednesday Markets: Tech Dips, Job Growth Slows, Inflation Eases
Alex Vellor
Markets saw notable declines on Tuesday as investors reacted to disappointing economic data and concerns over persistent inflation. The S&P 500 dropped 1.11%, while the Dow Jones Industrial Average shed 178.20 points (0.42%). The Nasdaq Composite was the hardest hit, down 1.89%, led by sharp losses in tech stocks. Nvidia fell 6.2%, while Tesla slipped 4%.
Pre-market movers:
| Company | Ticker | Change | Notes |
|---|---|---|---|
| Exxon Mobil | XOM | -0.7% | Warned of a decline in Q4 income by $1.75 billion due to lower oil refining profits and weak returns. |
| Nvidia | NVDA | +0.5% | Rebounded after its biggest one-day drop since September 2024. |
| Palo Alto Networks | PANW | -2.7% | Downgraded by BTIG and Deutsche Bank due to growth concerns in core and Next-Gen Security markets. |
| United Parcel Service | UPS | +0.6% | Received optimistic outlooks from Wolfe Research and Bernstein. |
| Ferguson Enterprises | FERG | +0.5% | Upgraded by BofA Securities to "buy" due to structural growth drivers and favorable inflation dynamics. |
| Adobe | ADBE | -1.3% | Downgraded by Deutsche Bank citing lack of tangible AI monetization evidence. |
| Tapestry | TPR | +1.3% | Upgraded by Barclays, citing a strong position in the global handbag sector. |
| Coca-Cola | KO | +0.3% | Upgraded by TD Cowen to "buy" as stock pullback seen as an overreaction to volume and trade policy concerns. |
Private Sector Job Growth Slows Further
The ADP National Employment Report, released Wednesday, painted a picture of a cooling labor market. Private companies added 122,000 jobs in December, falling short of the expected 136,000. This marks the weakest gain since August and reflects a broader slowdown from November’s 146,000 new positions.
Wage growth also decelerated, rising 4.6% year-over-year—the slowest increase since July 2021. ADP’s chief economist Nela Richardson noted that hiring and pay gains moderated in December, signaling a more subdued labor market.
These numbers precede the Bureau of Labor Statistics’ nonfarm payrolls report, due Friday. Economists expect a gain of 155,000 jobs, which would indicate a sharp decline from November’s 227,000—a figure that had defied expectations.
Job gains in December were uneven across sectors. Education and health services led with 57,000 new positions, followed by construction (27,000) and leisure and hospitality (22,000). Financial activities also added 12,000 jobs.
In contrast, several sectors saw job losses. Manufacturing shed 11,000 positions, natural resources and mining lost 6,000, and professional and business services declined by 5,000. Notably, large companies with over 500 employees accounted for the bulk of December’s job growth, adding 97,000 positions.
Tech Stocks Slide as Meta Shifts Strategy
The tech sector faced additional scrutiny after Meta Platforms (NASDAQ:META), the parent company of Facebook and Instagram, announced a significant policy shift. The company will discontinue its third-party fact-checking services and adopt a “Community Notes” model, similar to Elon Musk’s X (formerly Twitter).
Meta’s CEO, Mark Zuckerberg, said the change reflects a renewed focus on free expression, reducing policy complexity, and addressing user concerns about content restrictions. President-elect Donald Trump praised the adjustments.
AI Startups Continue to Attract Investment
Meanwhile, artificial intelligence remains a hotbed for investor interest. Anthropic, an AI startup founded by former OpenAI executives, is reportedly close to raising $2 billion in funding. The round, led by Lightspeed Venture Partners, values the company at $60 billion.
Backed by Amazon (NASDAQ:AMZN), Anthropic is the creator of AI chatbot Claude and is positioning itself as a key competitor in the booming AI sector. The funding underscores the tech world’s ongoing appetite for AI innovation despite recent market volatility.
About The Author
Alex Vellor
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