S&P 500 Dips as Weak August Jobs Report Fuels Rate Cut Speculation Amid Economic Worries
S&P 500 Dips as Weak August Jobs Report Fuels Rate Cut Speculation Amid Economic Worries
Wall Street saw a fragile rally dissolve on Friday, September 5, 2025, as the S&P 500 gave up earlier gains, closing lower amidst growing economic concerns triggered by a weaker-than-expected August jobs report. All three major indexes – the S&P 500, Nasdaq, and Dow – had touched fresh record intraday highs before fears of a slowing economy took hold.
The U.S. economy added a mere 22,000 jobs in August, significantly below the 75,000 economists polled by Dow Jones had anticipated. The Bureau of Labor Statistics reported the unemployment rate rose to 4.3%, aligning with expectations. This data, coupled with a revision showing the first job loss since the pandemic in June payrolls, has intensified recessionary concerns among some investors.
Traders are now increasingly betting on the Federal Reserve to implement a rate cut at its upcoming September 17 policy meeting. Fed funds futures, according to CME Group’s FedWatch tool, suggest a quarter-percentage-point cut is highly probable, with some even putting a half-point cut in play following the latest payrolls figures. Analysts note that slower job gains and moderating wage growth provide strong justification for the Fed to ease monetary policy.
The market downturn saw financial giants JPMorgan and Wells Fargo, along with industrial heavyweights Boeing and GE Aerospace, suffer losses amid fears that a slowing economy could dampen loan growth and overall business activity. Conversely, chipmaker Broadcom emerged as a standout performer, surging 10% after reporting strong quarterly results and announcing $10 billion in custom AI chip orders from a new customer. This news, however, contributed to a 3% drop in Nvidia shares and a 2% slide for Palantir, as investors ponder increasing competition in the artificial intelligence sector.
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