Intel’s Stock Prices Decline Amid Job Cuts and Economic Concerns
The stock prices of Intel have dropped by approximately 26%, following a bleak forecast from the company and the announcement of plans to eliminate 15,000 jobs.
On August 2, major U.S. stock indices ended the trading session lower, with the S&P 500 experiencing its worst day in nearly two years. This decline was attributed to a weaker-than-expected jobs report in the United States, as reported by Bloomberg.
The Dow Jones Industrial Average, a benchmark for blue-chip stocks, fell by 1.51% to close at 39,737.26 points. The broader S&P 500 index decreased by 1.84%, ending at 5,346.56 points. Meanwhile, the tech-heavy Nasdaq Composite dropped by 2.43%, finishing at 16,776.16 points.
U.S. Job Growth Slows and Unemployment Rate Rises
According to data from the U.S. Department of Labor, job growth in the country has slowed more than anticipated, with the unemployment rate rising. Non-farm employment increased by only 114,000 jobs in July, a significant drop from the 179,000 reported in June and below the Dow Jones forecast of 185,000. The unemployment rate climbed to 4.3%, marking its highest level since October 2021.
Wage Growth Falls Short of Expectations
The average hourly wage, a closely monitored indicator of inflation, saw a modest increase of 0.2% for the month and 3.6% year-over-year. Both figures fell short of expectations, which were set at 0.3% and 3.7%, respectively, according to the data released on Friday.
Amazon’s Stock Takes a Hit
Amazon.com Inc. shares fell by around 8.8% after the retail giant reported a slowdown in online sales growth for the second quarter, indicating that cautious consumers are opting for lower-priced purchasing options. Amazon’s Chief Financial Officer, Brian Olsavsky, stated that consumers “continue to be cautious and are cutting back on spending.”
Snap Inc. Faces Significant Stock Drop
Snap Inc. also experienced a severe decline, with stock prices plummeting over 26%. The company, which owns Snapchat, issued a grim forecast that raised concerns on Wall Street regarding its ability to compete with larger rivals in the advertising space. The social media platform predicted third-quarter results that fell short of market expectations, citing weak demand from advertisers in the non-essential consumer goods sector.
Nvidia’s Stock Prices Decline
Additionally, Nvidia’s stock prices have also decreased, reflecting the broader trends impacting the tech sector amidst economic uncertainties.
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US Government Launches Antitrust Investigation Against Chip Manufacturer
The US government has initiated an antitrust inquiry into a major chip manufacturing company, reflecting concerns raised by competitors in the semiconductor industry. This investigation comes at a time when the competition in technology is intensifying, particularly with the rise of artificial intelligence.
Intel’s Stock Takes a Major Hit
In the wake of a sobering forecast and the announcement of plans to cut 15,000 jobs, Intel’s shares plummeted by an alarming 26%. These developments indicate that the semiconductor giant may be struggling to adapt to the rapidly evolving landscape of artificial intelligence technology.
Bond Market Update
In the bond markets, the yields on 10-year and 30-year US Treasury bonds fell to 3.795% and 4.106%, respectively, signaling shifts in investor sentiment and economic outlook.
Dollar Index Declines
The US dollar index, which measures the strength of the American currency against a basket of foreign currencies, dropped by 1.16% to reach 103.21 points, indicating a loss of confidence among investors.
Oil Prices Experience Decline
On the oil markets, the price of Brent crude fell by 2.93% to $77.19 per barrel, while the price of US West Texas Intermediate (WTI) crude dropped by 3.13% to $73.92 per barrel, reflecting fluctuations in global demand and supply dynamics.
Gold Prices Slightly Decrease
The price of gold also saw a minor decline, decreasing by 0.4% to $24,769.8 per ounce, as investors adjust their portfolios amid changing market conditions.
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