Stock Market Today: Dow, S&P 500, Nasdaq Reverse as Weak Jobs Data Fuels Fed Cut Bets

Weak U.S. Jobs Report Triggers Sharp Reversal Across Equities

Wall Street was forced into a recalibration Friday after the Bureau of Labor Statistics revealed that the U.S. economy added just 22,000 jobs in August, far below expectations of 75,000. This weak print came alongside an unemployment rate that climbed to 4.3%, the highest since October 2021, reinforcing evidence that the labor market is softening in a meaningful way. Revisions painted an even darker picture: June payrolls were revised to show a loss of 13,000 jobs, the first contraction since 2020, while July’s gain was nudged up to 79,000. On a three-month average, job creation is running below 30,000 per month, compared with over a quarter-million monthly additions during the 2021–2022 post-pandemic recovery. Economists such as those at EY-Parthenon now project that job growth could average just 30,000 per month through year-end, pushing the unemployment rate toward 4.7% by December.

The immediate market response was a flight into Treasuries and a sharp repricing of Federal Reserve policy expectations. The 2-year Treasury yield fell 12 basis points to 3.47%, marking a three-year low, while the 10-year yield dropped nearly 9 bps to 4.07%, the lowest since April. The 30-year yield slipped below 4.80% after flirting with 5% earlier in the week. Bond traders are now fully pricing a 25 basis point cut at the Fed’s September meeting, with nearly 12% odds of a 50 basis point “jumbo” cut, and expectations of at least three cuts before year-end. The U.S. Dollar Index (DXY) slumped 0.83% to 97.53, extending its weekly losses as investors bet on deeper policy easing.

Dow, S&P 500 and Nasdaq Slide After Early Euphoria

The equity rally that greeted the weaker jobs report quickly unraveled as investors weighed slowing labor momentum against the prospect of cheaper money. The Dow Jones Industrial Average (DJIA) closed at 45,371.51, down 249.78 points (-0.55%). The S&P 500 (SPX) finished at 6,471.11, lower by 30.97 points (-0.48%), while the Nasdaq Composite (COMP) slipped to 21,647.93, a loss of 59.76 points (-0.28%).

This reversal is significant, given that both the S&P 500 and Nasdaq had set intraday records earlier in the day. The move illustrates what many strategists are calling a “tale of two markets”: optimism over monetary easing colliding with mounting concern that the underlying economy may be stalling. The Russell 2000 (RUT), which tracks small caps, gave back early strength, sliding 0.17% to 2,375.46, even after briefly touching its highest levels since December. The Cboe Volatility Index (VIX) spiked 7.5% to 16.45, showing renewed hedging demand.

Broadcom Rockets on AI Momentum While NVIDIA Struggles

In technology, fortunes diverged dramatically. Broadcom (AVGO) surged 9.8% to $336.08, adding more than $138 billion in market value after reporting fiscal Q3 sales of $15.95 billion, up 22% year-over-year, with EPS of $1.69 exceeding consensus. Importantly, CEO Hock Tan disclosed more than $10 billion in new AI chip orders from a major client widely believed to be OpenAI (OPAI.PVT). Shares touched an intraday high of $356.24, underscoring confidence that Broadcom can take market share from GPU leader NVIDIA. AVGO has now advanced over 32% in 2025, pushing its valuation past $1.6 trillion.

In contrast, NVIDIA (NVDA) fell 3.3% to $166.03, wiping out roughly $160 billion in capitalization. Despite retaining the crown as the world’s most valuable listed company with a market cap above $4 trillion, investors are reassessing near-term upside given Broadcom’s push into custom AI semiconductors and AMD’s growing traction. Advanced Micro Devices (AMD) was hit even harder, tumbling 6.8% intraday as rotation within AI chip plays favored Broadcom. Analysts such as Bank of America’s Vivek Arya argue that while NVIDIA’s margins may come under pressure, the overall AI chip market remains on a rapid expansion trajectory — a “bigger pie” scenario where multiple players can thrive.

Tesla Advances on $1 Trillion Musk Compensation Proposal

Tesla (TSLA) rose 2.95% to $348.52 after its board proposed a staggering $1 trillion compensation package for CEO Elon Musk. The plan would grant Musk 423 million shares if Tesla achieves milestones including a market capitalization of $8.5 trillion and the rollout of 1 million autonomous Robotaxis. The award would raise Musk’s voting power to nearly 25%, ensuring he retains decisive influence over the EV maker’s strategy. Wedbush called the move “critical,” noting that Tesla’s future hinges on Musk’s leadership as it transitions toward autonomy and robotics. Shares peaked nearly 5% higher intraday before paring gains.

Mixed Performance Among Dow Components

Several Dow constituents offered a counterweight to broader weakness. Boeing (BA) edged up 0.5%, approaching a technical buy point of $242.69, while Home Depot (HD) extended its rally with a 1.1% gain, building a three-day winning streak. Microsoft (MSFT) added 0.7% to $496.75, reclaiming its 50-day moving average, though it closed 2.2% lower on the session. On the downside, NVIDIA’s drop exerted pressure, while Apple and Meta traded largely flat.

Lululemon Collapses While Software Stocks Surge

Earnings brought stark contrasts. Lululemon Athletica (LULU) collapsed 18.2% to $168.52 after fiscal Q2 revenue of $2.52 billion missed forecasts, despite EPS of $3.10 beating expectations. Same-store sales rose just 1%, far below the 3.7% consensus, leading management to slash full-year guidance. Analysts warned that the U.S. market, which accounts for 40% of revenue, is losing momentum and that margins could deteriorate further as tariffs bite.

In software, Guidewire Software (GWRE) surged 17% on EPS of $0.84, up 35% YoY, and revenue of $357 million, up 22%. DocuSign (DOCU) rose 8% after posting EPS of $0.92 on $801 million in revenue, broadly in line with expectations, while Samsara (IOT) climbed 11.6% after upbeat industrial IoT demand. UiPath (PATH) gained nearly 6%, reporting EPS of $0.15, a 275% YoY increase, with revenue of $362 million, though shares remain in a broader downtrend. 

Gold Holds Record Highs Amid Fed Uncertainty

Gold continued its relentless climb, holding near all-time highs at $3,645.60/oz, up 1.08% on the day and more than 35% year-to-date. The precious metal has surged as investors brace for aggressive Fed easing, a weakening dollar, and heightened geopolitical risk. The rally comes after Fed Chair Jerome Powell hinted at the possibility of cuts last month, while President Trump’s repeated attacks on Powell — branding him “Too Late Powell” — have raised concerns over central bank independence. Silver has followed gold’s trajectory, with both metals having more than doubled over the past three years, cementing their role as defensive hedges in a volatile macro backdrop.

Political Pressure and Fed Credibility at Stake

President Trump intensified criticism of the Federal Reserve following the weak jobs report, renewing calls for immediate rate cuts. The administration has floated replacing Fed governors and already ousted the head of the Bureau of Labor Statistics after July’s report, raising alarms about the politicization of economic data. Trump’s push for Stephen Miran as a Fed governor underscores a preference for policy doves. Investors see this as a prelude to a Fed increasingly shaped by political priorities, with risks for long-term credibility.

With markets now pricing 100% probability of a September cut and nearly three additional moves by year-end, the stage is set for a high-stakes showdown between market expectations, Fed independence, and the economic data. Historically, equity markets have advanced when the Fed cuts outside of recessions, but investors remain wary that inflationary risks could return if policy loosens too aggressively.

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