US Equity Indexes Retreat in Midday Trading Following Bleak Jobs Report

01:25 PM EDT, 09/05/2025 (MT Newswires) -- US equity indexes declined after midday on Friday as a significant deterioration in the August non-farm payrolls report sent government bond yields, the dollar, and crude oil sharply lower.

The Nasdaq Composite fell 0.2% to 21,658.9, with the S&P 500 down 0.5% to 6,467.8, and the Dow Jones Industrial Average 0.5% lower at 45,385.7 amid concerns that weakness is gripping the labor market in a largely consumption-driven economy.

The economically sensitive energy, financials, and industrials sectors led the decliners intraday, while the real estate sector, a beneficiary of interest-rate cuts being priced in, was among the gainers.

Non-farm payrolls rose by 22,000 last month, the Bureau of Labor Statistics reported Friday, falling short of a 75,000 increase expected in a survey compiled by Bloomberg. Gains for July were revised up by 6,000 to 79,000, while June payrolls were adjusted downwards by 27,000 to show a 13,000 decrease, the BLS said.

The unemployment rate rose to 4.3%, as expected, up from 4.2% in July.

"The US job market is definitely weakening below most estimates of lowered breakeven rates in light of tighter immigration policy," Derek Holt, the head of capital markets economics at Scotiabank, said in a note. "When paired with [Federal Reserve] Chair [Jerome] Powell's pivot at Jackson Hole, the result cements a rate cut on the 17th. The residual questions are how big and/or how frequent."

The odds of a 25-basis-point cut in interest rates in September stood at 88% by Friday afternoon, down from 99.6% earlier in the day, making way for a bigger, 50-basis-point cut at the Fed policy meeting, according to the CME FedWatch Tool. The probability of a 50 basis points cut was 12%, compared with zero a day ago. A 4% possibility of rates being left unchanged as of the end of Thursday disappeared by Friday afternoon.

Most Treasury yields dropped, with the 10-year yield down 10.6 basis points to 4.07% and the two-year rate 11.4 basis points lower at 3.48%.

Gold futures rose 1.2% to $3,650.11, after scaling a new peak of $ 3,655.50 earlier in the session.

The ICE US Dollar Index slid 0.8% to 97.55.

West Texas Intermediate crude oil futures slumped 3% to $61.61 a barrel.

In company news, Lululemon Athletica (LULU) shares plunged 18% intraday, the steepest decline on the S&P 500 and the Nasdaq, after the company lowered its full-year outlook following a drop in fiscal Q2 net income.

Broadcom (AVGO) expects its fiscal 2026 artificial intelligence revenue outlook to improve "significantly" after securing more than $10 billion of orders for AI racks. The chipmaker, whose shares surged 11% intraday, the top gainer on the S&P 500 and the Nasdaq, reported higher fiscal Q3 non-GAAP net income and sales overnight.

Broadcom (AVGO) will begin mass production next year of a custom AI chip co-designed with OpenAI, which would like to reduce its reliance on Nvidia (NVDA) , the Financial Times reported, citing unnamed sources familiar with the matter. Shares of Nvidia (NVDA) dropped 2.9% intraday, the worst performer in the Dow Jones index.

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