Why Charles Schwab Stock Fell Sharply Friday
Charles Schwab Corporation's stock (SCHW) fell 5.72% to $92.05 on Friday, influenced by a weak U.S. jobs report that raised concerns about economic growth. The report indicated only 22,000 jobs were added in August, far below expectations, leading to speculation that the Federal Reserve may cut interest rates at its upcoming meeting. Lower interest rates could compress net interest margins for financial firms like Schwab, impacting profitability. Despite the downturn, SCHW maintains a strong Momentum score of 84.76 according to Benzinga Edge rankings.
Charles Schwab Corporation Common Stock SCHW shares are trading lower on Friday afternoon, part of a broader downturn in the financial sector following a surprisingly weak U.S. jobs report that heightened concerns about economic growth.
See what is driving SCHW stock movement here.
What To Know: The August employment data, released Friday morning, showed the U.S. economy added only 22,000 jobs, a figure dramatically below economists’ expectations and a sharp deceleration from previous months. The report has solidified market bets that the Federal Reserve will be forced to cut interest rates at its upcoming Sep. 17 meeting to support the slowing economy.
While the prospect of looser monetary policy can often buoy markets, it typically pressures the profitability of financial firms such as Schwab. Lower interest rates tend to compress net interest margins, which is the spread between what banks earn on assets and pay out on deposits.
The bond market reacted immediately to the news, with Treasury yields falling significantly. This drop reflects the market’s increased certainty of a Fed rate cut, directly impacting the earnings outlook for rate-sensitive banking and brokerage stocks.
Benzinga Edge Rankings: Despite Friday’s downturn, Benzinga Edge rankings show the stock holds a strong Momentum score of 84.76.
SCHW Price Action: According to data from Benzinga Pro, Schwab shares closed Friday’s session lower by 5.72% to $92.05. The stock has a 52-week high of $99.59 and a 52-week low of $61.16.
How To Buy SCHW Stock
Besides going to a brokerage platform to purchase a share — or fractional share — of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For Charles Schwab, it is in the Financials sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
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