Market Recap - Thursday, September 4, 2025
Stocks Climb as Job Data Weakens, Hopes Rise for Fed Rate Cuts
Stocks rebounded strongly today, with the S&P 500 rising 0.83% to a new all-time closing high, while the Nasdaq gained 0.98%, the Dow added 0.77%, and the Russell 2000 led with a 1.26% jump. Gains were broad-based, fueled by strength in banks, homebuilders, retail, and cruise lines. Tech was mostly higher, with Amazon a standout, though some weakness lingered in airlines, software, and utilities.
Economic Highlights
The job market is showing more signs of cooling. August’s ADP private payrolls came in below expectations, suggesting a slowdown in hiring — possibly linked to labor shortages, hesitant consumers, and AI-driven shifts. Initial jobless claims ticked up slightly. Meanwhile, the ISM Services Index came in stronger than expected, showing growing demand but also continued inflation concerns tied to tariffs. Labor productivity for Q2 was revised higher, and labor costs were revised lower — good news for inflation watchers. All eyes are now on Friday’s official jobs report.
Fed & Policy Watch
Concerns about Fed independence lingered after news broke that two senior officials may have mixed government and Fed roles. That said, Fed members continued to strike a cautious but dovish tone, with New York Fed President Williams reiterating that gradual rate cuts remain on the table if data continues to cool.
Other Market Movers & Headlines
Amazon (AMZN) jumped after reports of major new data centers for AI partner Anthropic.
Salesforce (CRM) fell despite beating earnings due to weak guidance.
American Eagle (AEO) soared after a strong earnings report and upbeat guidance.
Ciena (CIEN) and Shoe Carnival (SCVL) posted double-digit gains on strong results.
Figma (FIG) tumbled nearly 20% after earnings missed and margin pressures grew.
Gitlab (GTLB) and C3.ai (AI) both declined amid guidance issues and AI-related cost concerns.
On the policy front, the U.S. and Japan may be nearing a deal on auto tariffs, while Trump pushes the Supreme Court to fast-track the tariff legality case.
Treasury & Commodities
Treasury yields eased, helping stocks.
Gold fell 0.8%, and oil dipped another 0.8%.
Bitcoin slid 2.3%.
Here's Our Take
Markets are finding their footing again, helped by softening labor data and rising hopes for Fed rate cuts. The S&P 500 closing at a new record shows investors are leaning into the “bad news is good news” narrative. Still, big-picture risks remain—from political noise and tariffs to AI volatility and seasonal headwinds. The jobs report Friday will be key. If it confirms a gradual cooling without flashing recession signals, expect more talk of a soft landing and rate cuts ahead. Until then, expect continued choppiness, but with upward bias as long as data supports the dovish case.
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