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Weekly Market Recap: Markets Start September on Mixed Footing as Jobs Data Fuels Fed Rate Cut Bets Thumbnail

Weekly Market Recap: Markets Start September on Mixed Footing as Jobs Data Fuels Fed Rate Cut Bets

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Market Overview

U.S. equities opened September on a cautious note, with the S&P 500 and Nasdaq inching higher while the Dow slipped into negative territory for the week. Investors weighed softening labor market data, renewed tariff headlines, and upbeat corporate earnings. Technology led gains midweek, buoyed by a favorable ruling for Alphabet and solid results from Broadcom. However, weaker-than-expected ADP and BLS payrolls data dragged indices lower into the weekend. Internationally, European equities swung between political jitters in France and easing inflation pressures, while Asian markets delivered mixed results as Chinese regulators sought to cool overheating valuations.

Fixed income markets rallied Friday, with Treasuries pricing in a September Fed rate cut following disappointing employment data. Commodities advanced, with gold surging toward $3,600/oz in its strongest week in three months, while oil slipped on renewed OPEC+ supply concerns. The U.S. dollar weakened into week’s end, supporting the yen and euro.

Federal Reserve Insights and Economic Roundup

August’s employment report showed payrolls rising just 22,000, down sharply from July’s upwardly revised 79,000. Unemployment ticked up to 4.3% while average hourly earnings held steady at 3.7% year-over-year, keeping wage growth above inflation. Hiring was concentrated in healthcare and social assistance, while most other sectors were flat. Revisions to June and July data pointed to slower momentum than previously reported.

The cooling labor market strengthens the Fed’s case for easing at its September meeting. While conditions don’t appear weak enough for a half-point move, markets now expect a 25 basis point cut. Policymakers will weigh these dynamics against persistent tariff uncertainty and inflation trends.

The Week Ahead

Investors will turn their attention to a heavy slate of economic data, including:

  • Tuesday: NFIB Small Business Optimism, BLS revisions
  • Wednesday: Producer Price Index (PPI)
  • Thursday: Consumer Price Index (CPI), weekly jobless claims, Fed budget balance
  • Friday: University of Michigan Consumer Sentiment (prelim)

These releases will provide critical insight into inflation, consumer confidence, and small business conditions—key variables shaping Fed policy and market direction this month.