On Friday, the S&P 500 Index ($SPX) declined by -0.32%, the Dow Jones Industrial Average ($DOWI) dropped -0.48%, while the Nasdaq 100 ($IUXX) edged up +0.08%. September E-mini S&P 500 futures (ESU25) fell -0.35%, and September E-mini Nasdaq futures (NQU25) gained +0.04%. Initial optimism following a weaker-than-expected US employment report gave way to broader market declines as investors grew cautious about corporate profitability amid signs of economic slowdown.
The August nonfarm payroll increase of just +22,000 jobs fell significantly short of the projected +75,000. Over the prior three months, average monthly job growth stood at only +29,000. Revisions showed July’s figure adjusted upward to +79,000 from +73,000, but June’s numbers were revised down to a loss of -13,000 positions. Private sector hiring rose by a modest +38,000, while manufacturing employment contracted by -12,000. The unemployment rate climbed to 4.3%, the highest in over three years, up from 4.2% in July.
Average hourly earnings rose +0.3% month-over-month, matching forecasts. Year-over-year wage growth slowed to +3.7%, down from +3.9% in July and slightly below the anticipated +3.8%, suggesting some relief in inflationary pressures.
Bond markets reacted positively to the data, with the yield on the 10-year Treasury note dropping -7.1 basis points to 4.090%, reaching a five-month low. This decline was supported not only by expectations of Federal Reserve rate cuts but also by a -1.6 bp drop in 10-year inflation breakeven rates, influenced by the soft labor data and a -2.5% fall in crude oil prices.
Markets now assign a 9% probability to a 50 basis point rate reduction at the Federal Open Market Committee meeting on September 16–17, a shift from zero expectation previously. After the anticipated -25 bp cut in September, there is an 84% chance of another -25 bp reduction in October, up from 54% before the report. Overall, traders expect a cumulative -73 bp decline in the federal funds rate by year-end, bringing it down to 3.65% from the current 4.38%.
In a separate development, a federal appeals court determined that former President Trump overstepped his authority by imposing broad tariffs without congressional approval. However, the tariffs remain active pending further appeals. The ruling from the US Court of Appeals for the Federal Circuit stated that while the president holds substantial emergency powers, the imposition of tariffs is not among them. The matter may now proceed to the Supreme Court. According to Bloomberg Economics, average US tariff rates could rise to 15.2%, up from 13.3%, and significantly higher than the 2.3% recorded before the tariff announcements.
Global equity markets showed mixed results. The Euro Stoxx 50 dipped -0.53%, while China’s Shanghai Composite rose +1.24%, ending a three-day losing trend. Japan’s Nikkei 225 advanced +1.03%.
In the bond market, December 10-year Treasury notes (ZNZ5) gained +15.5 ticks. European yields also declined, with the 10-year German bund yield falling -5.7 bp to 2.662% and the UK 10-year gilt yield dropping -7.5 bp to 4.646%. Market pricing suggests only a 1% chance of a rate cut by the European Central Bank at its September 11 meeting.
Among individual stocks, the so-called Magnificent Seven delivered mixed performance. Tesla (TSLA) surged +3.6% after announcing a long-term compensation plan for Elon Musk, potentially valued at up to $1 trillion, tied to ambitious performance milestones. Apple (AAPL) dipped slightly despite reporting record annual sales of nearly $9 billion in India. Nvidia (NVDA) fell -2.7% as Broadcom moves into AI chip development, challenging its dominance. Microsoft (MSFT) declined -2.6% and Amazon (AMZN) -1.4%.
Broadcom (AVGO) jumped +9.4% following a partnership with OpenAI to co-develop a new AI-focused semiconductor, signaling a strategic push into Nvidia’s core market. Other chipmakers also gained, with Micron (MU) up +5.8%, and ASML (ASML), KLA-Tencor (KLAC), and Align Technology (ALGN) each rising over +3%.
Energy companies declined due to a -2.5% drop in October WTI crude futures, triggered by reports that OPEC+ may accelerate production increases. ConocoPhillips (COP), Diamondback Energy (FANG), Exxon Mobil (XOM), Chevron (CVX), and Devon Energy (DVN) all fell more than -2%.
Cryptocurrency-related equities were divided. Bitcoin (^BTCUSD) rose +1%, but Coinbase (COIN) dropped -2.5%, while MicroStrategy (MSTR) gained +2.5%. Riot Platforms (RIOT) and MARA Holdings (MARA) each posted gains above +0.5%.
Homebuilders benefited from lower Treasury yields, which tend to reduce mortgage borrowing costs. DR Horton (DHI), Lennar (LEN), and PulteGroup (PHM) all rose over +2%, with Toll Brothers (TOL) up +1.4%.
Lululemon Athletica (LULU) plunged -18.6% after lowering its full-year outlook, citing a challenging consumer landscape and the impact of tariffs.
Earnings updates on September 8, 2025, included Casey’s General Stores (CASY).
— news from Nasdaq
— News Original —
Stocks Fade on Economic Concerns after Weak US Unemployment Report
The S&P 500 Index ($SPX) (SPY) on Friday fell -0.32%, the Dow Jones Industrials Index ($DOWI) (DIA) fell -0.48%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose +0.08%. September E-mini S&P futures (ESU25) fell -0.35%, and September E-mini Nasdaq futures (NQU25) rose +0.04%. n nStocks on Friday initially rallied after the weak US unemployment report, which solidified market expectations for at least two Fed rate cuts by year-end. However, stocks then turned lower as market sentiment turned negative on concern about weaker US corporate earnings if the US economy is headed towards a recession. n nJoin 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily. n nFriday’s Aug payroll report of +22,000 was weaker than the consensus of +75,000. Over the past three months, payrolls have shown an average monthly rise of only +29,000. July payrolls were revised slightly higher to +79,000 from +73,000, but June was revised lower to a decline of -13,000. Aug private payrolls rose by only +38,000, while manufacturing payrolls fell by -12,000. The Aug unemployment rate rose by +0.1 point to a 3.75-year high of 4.3%, up from +4.2% in July, which was in line with market expectations. n nAug average hourly earnings rose by +0.3% m/m, which was in line with market expectations. In a positive inflation development, the Aug average hourly earnings report eased to +3.7% y/y from +3.9% in July and was slightly weaker than expectations of +3.8%. n nStocks received underlying support as the 10-year T-note yield fell -7 bp on the US unemployment report. The markets are now pricing in a 9% chance of a 50 bp rate cut at the upcoming FOMC meeting on Sep 16-17, versus the previous expectations of a zero chance of that 50 bp rate cut. After the fully expected -25 bp rate cut at the Sep 16-17 meeting, the markets are now discounting an 84% chance of a second -25 bp rate cut at the Oct 28-29 meeting, up from a 54% chance as of late Thursday. The markets are now pricing in an overall -73 bp rate cut in the federal funds rate by year-end to 3.65% from the current 4.38% rate. n nRegarding tariffs, a federal appeals court ruled late last Friday that President Trump exceeded his authority by imposing global tariffs without Congressional approval, but the court let the tariffs remain in place while appeals continue. The US Court of Appeals for the Federal Circuit Court said, “The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax.” The case now appears to be headed to the Supreme Court for a final decision. According to Bloomberg Economics, the average US tariff will rise to 15.2% if rates are implemented as announced, up from 13.3% earlier, and significantly higher than the 2.3% in 2024 before the tariffs were announced. n nOverseas stock markets on Friday closed mixed. The Euro Stoxx 50 closed down -0.53%. China’s Shanghai Composite closed up +1.24%, snapping a 3-session losing streak. Japan’s Nikkei Stock 225 closed up +1.03%. n nInterest Rates n nDecember 10-year T-notes (ZNZ5) rose by +15.5 ticks. The 10-year T-note yield fell by -7.1 bp to 4.090% and posted a 5-month low. T-note prices rallied on the weak US unemployment report and the increased chances for Fed easing. T-note prices also saw support from Friday’s -1.6 bp decline to 2.374% in the 10-year inflation expectations rate, driven by the weak unemployment report and the -2.5% plunge in crude oil prices. n nThe Treasury market on Friday focused on the weak US unemployment and ignored, for the time being, concerns about Fed independence sparked by President Trump’s attempt to fire Fed Governor Cook and by Stephen Miran’s intention to be a Fed Governor while still technically holding his White House job on the Council of Economic Advisors. n nEuropean government bond yields ended lower. The 10-year German bund yield fell -5.7 bp to 2.662%. The 10-year UK gilt yield fell -7.5 bp to 4.646%. n nSwaps are discounting the chances at 1% for a -25 bp rate cut by the ECB at the September 11 policy meeting. n nUS Stock Movers n nThe Magnificent Seven stocks on Friday closed mixed, with three stocks closing higher and four stocks closing lower. Tesla (TSLA) led the pack with a +3.6% gain after announcing a pay deal for Elon Musk potentially worth as much as $1 trillion to entice him to show up for work at Tesla and meet aggressive targets. Apple (AAPL) closed slightly lower despite news that its annual fiscal sales in India hit a record of nearly $9 billion. Nvidia (NVDA) fell -2.7% on news that Broadcom is encroaching on its AI chip territory. Microsoft (MSFT) fell -2.6%, and Amazon (AMZN) fell -1.4%. n nBroadcom (AVGO) rallied +9.4% on an agreement with OpenAI to design and produce a new AI chip, seeking to displace Nvidia’s stronghold in AI chips. Chip stocks were strong in general, with n nMicron (MU) up +5.8% and gains of more than +3% in ASML (ASML), KLA-Tencor (KLAC), and Align Technology (ALGN). n nEnergy stocks fell due to Friday’s -2.5% sell-off in Oct WTI crude oil on reports that Saudi Arabia wants OPEC+ to speed up the next oil production boost. ConocoPhillips (COP), Diamondback Energy (FANG), Exxon Mobil (XOM), Chevron (CVX), and Devon Energy (DVN) all closed lower by more than -2%. n nCrypto stocks closed mixed, even though Bitcoin (^BTCUSD) rallied +1%. Coinbase (COIN) fell -2.5%, but Strategy (MSTR) rallied +2.5%. Riot Platforms (RIOT) and MARA Holdings (MARA) closed up by more than +0.5%. n nHomebuilders rallied on Friday’s continued decline in the 10-year T-note yield, which put downward pressure on mortgage rates. DR Horton (DHI), Lennar (LEN), and PulteGroup (PHM) all closed up by more than +2%, while Toll Brothers (TOL) closed up +1.4%. n nLululemon Athletica (LULU) fell by -18.6% after reducing its guidance due to a weak consumer environment and tariffs. n nEarnings Reports(9/8/2025) n nCasey’s General Stores (CASY). n nOn the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. n nMore news from Barchart n nWhy Are American Power Bills So High in 2025? n nJobs Report Misses Forecast, Boosting Case for Fed Rate Cut n nStocks Rise Before the Open as Fed Rate-Cut Bets Grow, U.S. ADP Jobs Report in Focus n nIs the Stock Market Set to Fall on September 5? Mark Your Calendars. n nThe views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.