Market Recap - Friday, September 5, 2025
Weaker Jobs Report Fuels Rate Cut Bets, But Markets Lose Steam Late
Stocks couldn’t hold on to early gains despite a weaker-than-expected jobs report that initially boosted rate cut hopes. The S&P 500 slipped 0.32%, the Dow lost 0.48%, and the Nasdaq dipped just 0.03%, while the Russell 2000 outperformed with a 0.48% gain. Still, the S&P finished the week higher for the fourth time in five weeks, and the Nasdaq posted its first weekly gain in three weeks.
Big tech was mostly lower, though Tesla stood out with a strong move higher. Semiconductors (led by Broadcom), homebuilders, and China tech helped keep the market from falling further. Meanwhile, banks, energy, payments, and cruise lines were among the notable laggards. Bond yields fell across the curve after the soft jobs data, gold surged to another record, and oil sold off again after Saudi Arabia reportedly pushed for faster production increases at the upcoming OPEC+ meeting.
Economic Highlights
August’s jobs report showed just 22K new jobs, well below expectations for 77K, while revisions to prior months took June into negative territory. Unemployment ticked up to 4.3%, in line with estimates, and wage growth held steady at 0.3% m/m. While some on Wall Street now expect multiple rate cuts this year, others say the report wasn’t weak enough to signal a true recession, especially with household surveys still showing resilience. The market is now pricing in a 160% chance of a 50bp September cut, reflecting increased confidence in a policy pivot.
Beyond jobs, the focus is turning to next week’s inflation data (PPI and CPI), and Tuesday’s benchmark revisions to labor market stats. Meanwhile, tariff policy remains murky, with headlines around the US-Japan trade agreement, USMCA renegotiations, and how tariffs might continue providing a cushion for Treasury issuance despite legal challenges.
Company & Sector Highlights
Broadcom (AVGO) surged after announcing a major $10B AI chip order from OpenAI, lifting the entire semiconductor group, though NVIDIA and AMD slipped on competitive concerns.
Lululemon (LULU) dropped nearly 19% after weak U.S. sales and a reduced outlook—largely seen as company-specific.
Bill Holdings (BILL) popped 10% on news that Starboard has taken a large stake.
Other strong gainers included Guidewire Software (GWRE), Samsara (IOT), and ServiceTitan (TTAN) on upbeat earnings and AI tailwinds.
Treasuries, Commodities & Crypto
Treasury yields dropped 5–10 bps, helping equities early in the session.
Gold jumped 1.3% to another record.
Oil fell 2.5%, with OPEC+ rumors weighing on sentiment.
Bitcoin rose 1.4%.
The dollar index fell 0.6%.
Here's Our Take
The market is walking a fine line between celebrating cooler jobs data and worrying about what’s causing the slowdown. Friday’s jobs report all but confirmed that the labor market is cooling, and that’s increasing the odds of a near-term Fed rate cut — welcome news for rate-sensitive sectors. However, the softness also raised questions about growth. For now, the Fed looks likely to step in with easing, which is giving investors some comfort.
Still, the picture is messy. Tariff uncertainty, slowing hiring, sticky inflation in services, and seasonal market headwinds remain in play. AI remains a bright spot, but the sector is facing growing competition and some overhang from stretched valuations. Heading into next week, inflation data will be the next big test for the “soft landing” narrative. If it comes in tame, the market may find more room to rally — but if not, expect volatility to return in force.
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