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Traders work on the floor of the New York Stock Exchange during afternoon trading on Sept. 5, 2024.
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The S&P 500 edged up Friday as investors assessed a weaker-than-expected August jobs report and its implication on U.S. monetary policy.
The S&P 500 traded just 0.1% higher, while the Nasdaq Composite declined 0.4%. The Dow Jones Industrial Average rose 170 points, or 0.4%.
Popular semiconductor stocks lagged after Broadcom forecast fiscal fourth-quarter revenue that came up short of analyst estimates. Shares shed 9%, while Nvidia, Advanced Micro Devices and Marvell Technology slumped at least 2% in sympathy. The iShares Semiconductor ETF declined 2%.
Fresh August jobs data showed further signs of a slowing labor market as growth fears mount on Wall Street. Nonfarm payrolls grew by 142,000, versus a 161,000 gain expected by economists polled by Dow Jones. However, the unemployment rate edged down to 4.2%, in line with expectations.
"August payroll data indicate risks are rising as the labor market is clearly softening, and the Fed needs to step in to cut off tail risks," said Sonu Varghese, global macro strategist at Carson Group. "The report seals the deal for a September rate cut, but the big question really is whether the Fed goes big (by cutting 50 bps) to get in front of rising risks."
The data will influence the Federal Reserve's monetary policy decision later this month. A bout of weak labor data has fueled concerns about the health of the economy, spooking markets and denting risk appetite in recent weeks.
Investors remain optimistic that the Fed will cut rates by at least a quarter-percentage point at the conclusion of the September policy meeting. Nearly half of traders are currently pricing in a 50 basis point cut, according to CME Group FedWatch tool.
Friday's data print comes on the heels of a rocky week for equity markets. The S&P 500 is on pace for a 2.4% decline and its worst week since April, while the Nasdaq is down 3.5%. The 30-stock Dow has slumped 1.3%.
New York Fed President Williams backs rate cuts
New York Fed President John Williams on Friday endorsed interest rate cuts that markets expect to begin later this month.
"It is now appropriate to dial down the degree of restrictiveness in the stance of policy by reducing the target range for the federal funds rate," the central bank official said in remarks before the Council on Foreign Relations in New York. "This is the natural next step in executing our strategy to achieve our dual mandate goals."
—Jeff Cox
Stocks open slightly higher Friday
Stocks opened marginally higher Friday.
The S&P 500 added 0.2%, while the Nasdaq Composite edged up 0.1%. The Dow Jones Industrial Average rose 125 points, or 0.3%.
— Samantha Subin
Stocks making the biggest moves before the bell
Here are the stocks making moves premarket:
Bowlero – Shares gained more than 10% after the bowling alley chain's revenue for the fiscal fourth quarter revenue topped Wall Street's expectations. Revenue for the period came in at $283.9 million. According to FactSet, analysts had expected $273.4 million. The higher end of the company's revenue outlook for fiscal 2025 was also above estimates.
UiPath – The stock rose more than 9% following the software company's better-than-expected second-quarter results. UiPath posted adjusted earnings of 4 cents per share on $316 million in revenue. Analysts surveyed by LSEG estimated 3 cents per share and revenue of $304 million. The company also raised its full-year forecast and expanded its stock repurchase program.
Broadcom – Shares of the chipmaker fell more than 6% after the company's revenue guidance for the current quarter was less than expected. Broadcom projected $14 billion of revenue for its fiscal fourth quarter, slightly below the $14.04 billion estimated by analysts, according to LSEG. Broadcom did beat third-quarter estimates on the top and bottom lines.
Read the full list here.
— Sean Conlon
U.S. economy added 142,000 jobs in August
The U.S. economy added fewer-than-expected jobs in August, as traders assess the Federal Reserve's next move.
The Bureau of Labor Statistics said Friday that 142,000 jobs were created last month. Economists polled by Dow Jones expected a gain of 161,000 jobs for the month.
The unemployment rate fell to 4.2%, as expected.
— Fred Imbert
Berkshire continues to dump BofA shares
Berkshire Hathaway continued to dump Bank of America shares, extending the selling streak that started in mid-July.
Warren Buffett's conglomerate sold 18.7 million shares for about $760 million in separate sales between Monday and Wednesday, according to a regulatory filing.
Berkshire has sold almost $7 billion worth of the bank stock, driving its stake down to 11.1%. If the ownership goes below 10%, it will no longer be required to disclose transactions within two business days.
Shares of Bank of America dipped slightly in premarket trading Friday. The stock is down over 2% this week.
— Yun Li
Broadcom, DocuSign, UiPath among stocks making biggest after-hours moves
Check out the companies making headlines in after-hours trading:
- DocuSign — The e-signature software company ticked up nearly 1.2% after posting a top- and bottom-line beat. DocuSign's adjusted earnings of 97 cents per share for the second quarter exceeded analysts' expectations of 80 cents per share, according to LSEG. DocuSign's revenue of $736 million also beat estimates of $727 million for the quarter.
- Broadcom — The semiconductor company slipped more than 6.5%. Broadcom said it sees $14 billion of revenue for the fiscal fourth quarter, while analysts called for $14.04 billion, per LSEG. In the fiscal third quarter, Broadcom reported adjusted earnings of $1.24 per share on revenue of $13.07 billion, while analysts polled by LSEG called for earnings of $1.20 per share on revenue of $12.97 billion.
- UiPath — Shares gained 9.5% after the software company's fiscal second-quarter results came out better than expected. UiPath reported adjusted earnings of 4 cents per share on revenue of $316 million, while analysts surveyed by LSEG called for earnings of 3 cents per share on revenue of $304 million. The company also expanded its stock repurchase program.
For the full list, read here.
— Pia Singh
English (US)