The main North American indices had another day in the red, just as they had before their European counterparts. The Dow Jones fell 129,94 points, or 0,46%, to 27.902,44 points; the S & P 500 lost 28,42 points, or 0,84%, to 3.357,07 and the Nasdaq fell 140,19 points, or 1,27%, to 10.910,28 points.
Stocks fell, as the shares related to technology companies ´pushed´ the market down, which, on the other hand, didn’t stand up to the highest levels of weekly unemployment benefit claims.
Analysts already expected that, sooner or later, the technology would end up having a bad day after the August recovery, said Jake Dollarhide (a very appropriate name), CEO of Longbow Asset Management, quoted by Reuters. "Technology has had an incredible last week in August, and I think this is a rational profit-making scenario right now." Dollarhide expects technology roles to return to the upward path before the end of the year.
To raise concerns about an economic recovery that looks increasingly stagnant, the Department of Labor report made it known that the number of Americans who applied for new unemployment benefits fell last week, but remained at levels considered extremely high.
These results ended up accumulating the discontent caused by the intervention, the previous day, by the Federal Reserve, which pledged to keep interest rates low for an extended period to pull the world's largest economy out of a pandemic-induced recession.
Fed Chairman Jerome Powell exposed a number of factors - including wage growth, labor force participation and disparities in minority unemployment vis-à-vis whites - that must be reviewed before the Fed considers increasing interest rates.
"Investors love it when the Fed cuts rates, because they think it is good for the market," said Dollarhide. "But if the Fed says we need to keep rates low for longer, people are starting to worry about the economy itself."