September 4, 2020
What a difference a day makes! The seemingly unstoppable stock market hit a brick wall yesterday with all three major averages posting huge losses. The culprit? This sell-off was most likely led by the technology sector which is up nearly 70% since the March 23 low. On the day, the Dow plunged 807.77 points, or a loss of 2.8% - its biggest one-day decline since June 11. The S&P 500 which has gained more than 50% since the March low, dropped 3.5% to 3,445.06. The NASDAQ which has rallied over 60% since March, fell nearly 5% to close at 11,458.10.
The biggest news today came from the Labor Department who reported that 1.37 million nonfarm jobs were added in August. As a result, the unemployment rate dropped to 8.4%, far surpassing analysts’ expectations of a rate of 9.8%.
September is beginning to live up to its historical reputation of being the worst month of the year for stocks. As if yesterday’s losses were not enough, all three major market indices have turned negative this morning, led by a continued rout in technology shares. Investors seem unwilling to own stocks in such a volatile environment over the three-day holiday weekend.
While some areas of the country are showing declining COVID infections, public health officials are calling Americans to remain vigilant. “Wear a mask, keep social distancing, avoid crowds. You can avoid those kinds of surges,” said Dr. Anthony Fauci. “You don’t want to be someone who’s propagating the outbreak. You want to be part of the solution, not part of the problem.”