Weak Jobs Report Weighs on Equities Intraday; Yields Tumble

02:22 PM EDT, 09/05/2025 (MT Newswires) -- US benchmark equity indexes declined, while Treasury yields plunged intraday as a soft jobs report stoked fears about a slowing labor market.

The Dow Jones Industrial Average was down 0.7% at 45,289.7 after midday Friday, while the S&P 500 fell 0.6% to 6,460.2, following a record-high close in the previous session. The Nasdaq Composite dropped 0.4% at 21,629.3. Among sectors, energy and financials saw the biggest drop, while real estate paced the gainers.

In economic news, the US economy added 22,000 nonfarm jobs last month, official data showed. The consensus was for a 75,000 increase in a survey compiled by Bloomberg. The unemployment rate rose to 4.3% as Wall Street expected from 4.2% in July.

"There's no escaping that the labor market is softening, and quickly," TD Economics said. "(Federal Reserve) officials have become increasingly concerned about the downside risks to the labor market, and this morning's report will not assuage those fears."

The odds of a 25-basis-points rate cut on Sept. 17 fell to 90% on Friday from 96% on Thursday as Fed funds futures priced in a 10% chance for a reduction by half a percentage point, according to the CME FedWatch tool.

"US labor market deterioration intensified in August with net job gains slumping dangerously close to stall speed," BMO said. "This raises the risk of a harder landing for consumer spending and the economy in the months ahead."

US Treasury yields sank intraday, with the two-year rate tumbling 11.2 basis points to 3.48% and the 10-year rate losing 10.4 basis points to 4.07%.

In company news, Lululemon Athletica (LULU) shares tumbled 18%, the steepest decline on the S&P 500. The athletic apparel and footwear retailer late Thursday lowered its full-year outlook due to higher tariff rates, while its fiscal second-quarter sales fell short of market estimates amid weakness in North America.

Tesla (TSLA) shares were up 4% intraday Friday, among the best performers on the S&P 500 and the Nasdaq. The electric vehicle maker's board proposed a new compensation package potentially worth around $1 trillion for Chief Executive Elon Musk that would boost his voting power in the electric vehicle maker, a provision Wedbush Securities said is "critical" to retain him.

Broadcom (AVGO) was the top gainer on the S&P 500, up nearly 11%. Late Thursday, the chipmaker posted stronger-than-expected fiscal third-quarter results amid robust artificial intelligence chip demand.

The company has secured more than $10 billion in orders of custom AI racks from a new customer, Broadcom (AVGO) CEO Hock Tan said. "Reflecting this, we now expect the outlook for fiscal 2026 AI revenue to improve significantly from what we had indicated last quarter," Tan said on an earnings conference call.

Although the company didn't disclose the name of the new customer, markets are speculating that it could be Microsoft (MSFT) backed OpenAI. The parent of generative AI chatbot ChatGPT is working with Broadcom (AVGO) to produce its own AI chip, which is expected to ship next year, the Financial Times reported, citing people familiar with the partnership.

Nvidia (NVDA) shares were down 3% intraday, the worst performer on the Dow.

West Texas Intermediate crude oil was down 2.9% at $61.64 a barrel.

Eight members of the Organization of the Petroleum Exporting Countries and its allies will contemplate further increasing output next month at their meeting scheduled for Sunday, Reuters reported, citing sources.

Gold was up 1.2% at $3,650.70 per troy ounce, while silver added 0.2% to $41.49 per ounce.

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