Instant view: US job growth slows sharply in August, unemployment rate ticks higher
September 5, 2025
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September 5, 202510:17 AM EDTUpdated 28 mins ago
Traders work on the floor of the New York Stock Exchange January 11, 2016. REUTERS/Brendan McDermid/File photo Purchase Licensing Rights, opens new tab
- Summary
- Companies
- Indexes up: Dow 0.16%, S&P 500 0.45%, Nasdaq 0.71%
- August nonfarm payrolls below expectations
- Broadcom up following strong AI revenue growth forecast
- Lululemon plunges after profit forecast cut
Sept 5 (Reuters) – Wall Street’s main indexes hit intraday record highs on Friday after a weaker-than-expected August jobs report boosted bets on imminent rate cuts from the U.S. central bank, while chip major Broadcom surged on strong quarterly earnings.
Broadcom (AVGO.O), opens new tab soared 13% to a record high after the chip designer forecast fourth-quarter revenue above estimates and expected AI revenue growth to “improve significantly” in fiscal-year 2026.
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U.S. job growth weakened sharply in August and the unemployment rate rose to 4.3%, confirming that labor market conditions were softening and strengthening the case for an interest-rate cut from the Federal Reserve this month.
Traders of futures tied to the Fed’s policy rate added to bets that it will cut interest rates in quick succession starting this month.
CME’s FedWatch Tool showed markets are now pricing in a 16% chance of a jumbo 50-basis-point cut in September.
“It shows that the labor market is stalling to the point where we could experience negative job growth in the months ahead, and this is due to uncertainties over tariffs,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
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“This perhaps raises speculation that the Fed could cut (borrowing costs) by 50 basis points in September.”
At 09:43 a.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab rose 73.08 points, or 0.16%, to 45,694.37, the S&P 500 (.SPX), opens new tab gained 29.47 points, or 0.45%, to 6,531.55, and the Nasdaq Composite (.IXIC), opens new tab added 151.85 points, or 0.71%, to 21,861.39.
Rising rate-cut bets helped drive the real estate sector (.SPLRCR), opens new tab up 1.2% to lead sectoral gains, while the Philadelphia Housing Index (.HGX), opens new tab climbed 2.2% to an eight-month high.
Broadcom’s results boosted tech stocks (.SPLRCT), opens new tab, with the Philadelphia SE Semiconductor index (.SOX), opens new tab adding 2.1%.
Investors, who were unimpressed by Nvidia’s (NVDA.O), opens new tab quarterly results last week and concerned after the lofty valuations of AI-related firms briefly paused Wall Street’s rally in August, were relieved after Broadcom’s results.
On the other hand, Lululemon Athletica (LULU.O), opens new tab plunged 17.5% to a more than five-year low after the yogawear-maker slashed its annual profit forecast the second time in a row, dragging larger rival Nike (NKE.N), opens new tab down 1% and limiting gains in the consumer discretionary (.SPLRCD), opens new tab sector.
The S&P 500 closed at a record high on Thursday, with the Nasdaq and the Dow also finishing higher after a slew of economic indicators kept rate-cut hopes intact.
All three indexes were on track for gains in the first week of September. The S&P 500 has lost 1.5% on average in September since 2000, according to LSEG data, making it the worst month historically for U.S. equities.
In other moves, Tesla (TSLA.O), opens new tab added to gains and was last up 4.5% after the EV-maker proposed an about $1-trillion compensation package for top boss Elon Musk, subject to meeting lofty performance targets.
Samsara (IOT.N), opens new tab advanced 15% after the software firm beat second-quarter revenue expectations.
Advancing issues outnumbered decliners by a 5.06-to-1 ratio on the NYSE and by a 3.14-to-1 ratio on the Nasdaq.
The S&P 500 posted 24 new 52-week highs and two new lows, while the Nasdaq Composite recorded 93 new highs and 40 new lows.
Reporting by Purvi Agarwal and Ragini Mathur in Bengaluru; additional reporting by Johann M Cherian, Editing by Pooja Desai
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