US stock markets couldn’t keep the positive streak going beyond one week, with all three US benchmarks falling on Friday.
The technology sector was the biggest detractor, dragged down by Tesla (NASDAQ: TSLA) which fell another 9.2%. This meant the Nasdaq fell 2.5%, with the S&P 500 and Dow Jones slightly better, falling 1.6% and 1.1% as energy companies gained on the surging oil price.
Over the week, the Dow Jones delivered a 0.9% loss, the S&P 500 was down 1.2$ and the Nasdaq fell 1%.
Tesla’s concerns and growing hyperbole
Tesla’s fall on Friday appears to be driven by comments from CEO Elon Musk, who announced a freeze on all hiring and 10% staff cuts across the business, the latest in a trend of job cuts across tech businesses.
The comments hit despite US payrolls smashing expectations, with experts predicting 328k new jobs, but 380k being taken. This positive news for the workforce is seen as negative news for the economy, as it will likely force the Fed to continue to hike interest rates.
Musk also said he has a “super bad feeling” about the economy, which followed similar hyperbole from JP Morgan CEO Jamie Dimon, who talked of an “economic hurricane”.
Lululemon reports, American Airlines upgrades guidance
On the positive side was sportswear maker Lululemon (NASDAQ: LULU) which fell just 0.6% after reporting a 32% jump in revenue but flagging it was not immune from supply chain and inflation challenges.
Shares in American Airlines (NASDAQ: AAL) fell more than 7% after the company increased revenue guidance but also flagged higher energy costs as a hit to profits.
Back home on the ASX, the S&P/ASX 200 (ASX: XJO) is expected to follow this negative lead from US stock markets to open lower this morning. For a round-up of the latest news, check out my ASX 200 morning report.
