5 things to know before the stock market opens Friday, August 2

Here are the most important news items that investors need to start their trading day:

Stocks sold off on Thursday over fears of a potential recession hitting the economy. The Dow Jones Industrial Average plunged nearly 500 points, moving 1.21% lower to close out the session at 40,347.97. During the session, the index lost 744.22 points, or around 1.8%, at session lows. The S&P 500 and Nasdaq Composite also saw losses. The broad market index tumbled 1.37% to close the session at 5,446.68, and the tech-heavy Nasdaq shed 2.3% to finish at 17,194.15. Even the small-cap Russell 2000 index, which has been surging recently, fell 3%. The sell-off came after initial jobless claims rose the most since August last year. The ISM manufacturing index came in worse than expected at 46.8% – a sign that economic activity is contracting. Follow live market updates.

It’s time for more jobs data. July’s nonfarm payrolls report from the Bureau of Labor Statistics is set to be released at 8:30 a.m. ET Friday and is expected to show payroll gains of 185,000 for last month and the unemployment rate remaining at 4.1%, per the Dow Jones consensus estimate. That’s a decline from the 206,000 seen in June. In the first half of this year, job gains in the labor market have averaged 203,000 per month. For July, average hourly earnings are expected to increase 0.3% on the month and 3.7% from one year ago. “If the Fed was going to manufacture the soft landing, this is probably what it was going to look like,” said Mike Reynolds, vice president of investment strategy at Glenmede.

The quarterly results for Apple and Amazon are in. On Thursday, Apple reported fiscal third-quarter earnings that surpassed Wall Street’s expectations. Following the results, Apple CEO Tim Cook told CNBC’s Steve Kovach that a year-over-year increase in AI and Apple Intelligence spending is “embedded in our results this quarter.” However, not all of its capital investments in the June quarter were for AI, and Apple’s capital expenditure increase is tiny compared with that of its peers, such as Microsoft and Meta. Amazon missed revenue expectations for its second-quarter results, even though the company did beat on earnings. The company reported a disappointing revenue forecast for the third quarter. Amazon finance chief Brian Olsavsky said he expects an online shopping slip this quarter because customers are distracted by events such as the Paris Olympics and November’s presidential election.

On Thursday, two dozen prisoners were released as part of a multinational swap. Among them were Wall Street Journal reporter Evan Gershkovich and former U.S. Marine Paul Whelan. Russian-American journalist Alsu Kurmasheva and British-Russian activist Vladimir Kara-Murza were also part of the swap. In a televised White House address, U.S. President Joe Biden said that “all four have been imprisoned unjustly in Russia.” Eight Russians were also part of the swap, including spy and convicted hitman Vadim Krasikov and Russian entrepreneur Vladislav Klyushin. The latter was imprisoned over his involvement in an insider trading scheme that plagued Wall Street.

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