Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) closed in the red on Thursday following a disappointing labor market update.
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Investment firm Carlyle estimates that September’s nonfarm payrolls grew by 17,000, falling short of the consensus expectation for 50,000 additions. The Bureau of Labor Statistics usually publishes the data on the first Friday of each month, although the government shutdown has led to the suspension of the report.
“If you looked at the employment data, you’d think it’s an economy that’s on the cusp of or in a recession,” said Carlyle head of global research and investment management Jason Thomas. “That is nowhere else in the data.”
The White House has suggested in a draft memo that some furloughed federal workers will not receive backpay after the government reopens, with President Trump adding “some people that really don’t deserve to be taken care of.”
Meanwhile, the World Trade Organization (WTO) has raised its 2025 global trade growth forecast to 2.4%, up from its prior estimate of 0.9% in April. At the same time, the WTO now expects 2026 global trade growth of just 0.5%, down from its previous estimate of 1.8%. The organization cited the “full impact” of tariffs, as well as slower employment growth and trade-restrictive measures as reasons for its lower 2026 forecast.
Several voices on Wall Street have raised concern that the current market environment mirrors conditions seen before the Dot-Com Bubble crash of 2000. One of these voices is Bridgewater founder and billionaire Ray Dalio, who said that the market “feels frothy” with recent AI developments showing signs of being a bubble at the Greenwich Economic Forum. Multibillion-dollar AI deals led by OpenAI have also triggered red flags and euphoric investor sentiment.
“If any one of these deals falls through it has this domino effect downstream that I think is concerning,” said Zacks Investment Management client portfolio manager Brian Mulberry. “It reminds me of what happened with telecom back in the mid-nineties.”
Higher index concentration could also lead to volatile moves. Today, the top tech companies in the S&P 500 (SPX) account for about 35% of the index compared to 15% in 1999.
The S&P 500 (SPX) closed with a 0.38% loss, while the Nasdaq 100 (NDX) fell by 0.55%.
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