Market Recap - Wednesday, September 3, 2025
Stocks Climb on Tech Momentum and Cooling Labor Market Signals
Stocks finished mixed but leaned higher by the close, thanks to a late-session rally led by big tech. The Nasdaq gained 1.02%, the S&P 500 rose 0.51%, and the Dow edged down slightly by 0.05%. The Russell 2000 also dipped 0.10%, showing weakness in small caps. Alphabet (Google) and Apple were the biggest drivers, both rising after Google received a favorable antitrust ruling that avoided major penalties and allowed it to keep its lucrative partnership with Apple.
Outside of tech, other winners included department stores like Macy’s (after strong earnings), airlines, copper and aluminum producers, homebuilders (thanks to stable interest rates), and mortgage REITs. On the flip side, energy stocks fell with oil prices dropping 2.5% on reports that OPEC+ might increase supply. Banks, chemicals, dollar stores, and credit card companies also lagged.
Bond yields pulled back, with the 30-year Treasury yield falling 7 basis points, reversing Tuesday’s jump. The move followed weaker-than-expected job openings data from July, which showed the lowest number of vacancies since September 2024. This has fueled expectations for a rate cut from the Fed later this month, now priced in with over 90% probability.
Economic reports also showed factory orders dipped slightly but came in better than feared. Meanwhile, Fed officials including Waller, Bostic, and Kashkari continued signaling that rate cuts are likely coming, though they emphasized decisions will depend on incoming data. The Fed’s Beige Book showed a mixed picture of the economy, with soft consumer demand, hesitancy to hire, and tariff concerns still weighing on sentiment.
Here’s Our Take
Markets are finding support from two key forces: strength in big tech and signs that the labor market is cooling just enough to give the Fed confidence to ease policy. The Google ruling was a major relief for tech bulls, and Alphabet’s gains helped lift other mega-cap names. At the same time, a softer jobs market — confirmed by the JOLTS report — has investors betting the Fed will cut rates as soon as this month.
But caution is still warranted. Sticky inflation, ongoing tariff concerns, and weakness in key sectors like energy and retail (e.g., Dollar Tree’s underwhelming guidance) show that the path forward isn’t without bumps. Oil prices falling might help the inflation story, but if supply increases don’t keep pace with demand later in the year, that could reverse. All eyes now turn to Friday’s August jobs report to see if the soft landing narrative holds — or starts to crack.
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