Nasdaq Slips as Chip Stocks Dip from Record Highs

In New York, the Nasdaq and the S&P 500 experienced declines on Friday, partly due to a pullback in chip stocks from their recent highs. The market also reacted to a mixed labor market report indicating that employers added more jobs than anticipated in February, though the unemployment rate unexpectedly rose.

Earlier in the session, both indexes briefly reached new intra-day record highs before retracing their gains.

Notable chip stock Nvidia saw a 1.5% drop after hitting a new record high, contributing to losses among large-cap growth and technology companies. Similarly, the Philadelphia Semiconductor Index retreated from its peak, ending down 1.8%.

Dennis Dick, a trader at Triple D Trading, noted, “We’re just at a point where investors maybe have chased these stocks too much, and they need to cool off a bit.” He added that profit-taking might occur as investors feel cautious heading into the weekend.

Broadcom declined by 5.6% after its full-year forecast failed to meet investor expectations. In comparison, Marvell Technology saw a 9.1% drop after forecasting first-quarter results below market expectations due to soft demand in various markets.

By midday, the Dow Jones Industrial Average rose by 68.68 points, the S&P 500 fell by 1.81 points, and the Nasdaq Composite dropped by 31.25 points.

Despite the market dip, US job growth accelerated in February, with nonfarm payrolls increasing by 275,000 jobs, surpassing the expected 200,000 rise. However, data for January was revised downward to show 229,000 jobs created.

The unemployment rate rose to 3.9% in February, and wage growth slowed to 0.1% monthly. Cameron Dawson, chief investment officer of NewEdge Wealth, commented that the slower wage gains made the report “a pretty dovish print,” indicating less inflation pressure.

Federal Reserve Chair Jerome Powell’s recent remarks also influenced market sentiment. Powell suggested that the central bank was nearing confidence that inflation was falling sufficiently to consider cutting interest rates.

Investors are awaiting consumer prices (CPI) data next week for further insights into potential rate cuts.

In other news, Gap saw a 5.1% increase after beating Wall Street expectations for fourth-quarter results, driven by strong demand for its Old Navy and namesake brands during the holiday season. However, Costco Wholesale dipped by 6.6% as quarterly sales fell short of estimates due to tepid demand for higher-margin goods.

Overall, advancing issues outnumbered decliners on both the NYSE and Nasdaq, with several new highs recorded.

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