Jobs Jitters, Rate Cut Hopes

Fresh news and strategies for traders. SPY Trader episode #1359. This week's market saw mixed performance, with the S&P 500 and Nasdaq posting gains driven by big tech, while the Dow declined. Key movers included Broadcom and Macy's surging, Lululemon tumbling, and NVDA, MSFT, and AMZN dipping on tariff warnings. The August jobs report, significantly missing expectations with only 22,000 nonfarm payrolls and a 4.3% unemployment rate, has solidified predictions for a Federal Reserve interest rate cut this month. Inflation and weakening consumer sentiment remain key concerns as investors look to the upcoming Fed meeting and CPI data.

Episode Transcript

(00:00):
Welcome , savvy investors , to Spy Trader !
I'm your host , Captain Cashflow , and it's 6 am on Saturday , September 6th , 2025 , Pacific time .
We're here to break down the past few days on Wall Street and help you navigate the week ahead .
It's been a bit of a rollercoaster , with market resilience tempered by some economic jitters , but with a clear focus on the Fed .

(00:23):
Let's quickly recap the week's headlines .
The US stock market had a mixed performance .
The S&P 500 and Nasdaq Composite posted modest gains , while the Dow Jones Industrial Average saw a slight decline for the second straight week .
On Wednesday , the S&P 500 rose 0.5% and Nasdaq climbed 1% , thanks to big tech .

(00:48):
Thursday saw all three indexes up , with the S&P 500 hitting a new record , up 0.8% .
However , Friday brought a slight dip , with the Dow shedding 0.5% and the S&P 500 falling 0.3% , following a weakerthanexpected jobs report .

(01:09):
Yeartodate , we're looking strong , with the Nasdaq up 12.4% , the S&P 500 up 10.2% , and the Dow up 6.7% , all hovering near record highs .
Sectorwise , communication services led the pack , up 3.64% , followed by consumer cyclical .

(01:31):
Tech stocks , especially those in AI , performed well , and real estate saw gains on Friday due to ratecut optimism .
On the flip side , energy was the worst performer , down 3.13% , with financial services also declining .
Now for some specific movers .
Broadcom ( AVGO ) surged over 9% on Friday after beating quarterly results , driven by booming AI demand , with reports suggesting OpenAI is a new multibilliondollar customer .

(02:04):
Micron Technology ( MU ) also climbed 4.6% on Thursday .
Alphabet ( GOOG ) jumped 9% on Wednesday after a federal judge spared it from selling its Chrome browser in an antitrust case .
Macy's ( M ) stock soared almost 13% on Wednesday after reporting strong secondquarter results .

(02:26):
However , Lululemon ( LULU ) tumbled a massive 18.6% on Friday after its second profit warning , citing disappointing U.S.
operations and higher tariffs .
Tesla ( TSLA ) gained 3.6% on Friday on news of Elon Musk's performancebased pay package .

(02:46):
But Nvidia ( NVDA ) , Microsoft ( MSFT ) , and Amazon ( AMZN ) all dropped on Friday , reportedly due to President Trump's warning of semiconductor tariffs .
Moving to the broader economic picture , the big news this week was the August jobs report .
It showed the US economy added a mere 22,000 nonfarm payrolls , significantly missing the expected 75,000 .

(03:14):
This is the fourth consecutive month of weakening labor growth , and the unemployment rate climbed to a fouryear high of 4.3% in August .
This weak data has strongly reinforced expectations for a Federal Reserve interest rate cut at their upcoming meeting on September 1617 .

(03:34):
Some financial institutions are now projecting at least two to three rate cuts in 2025 , with an 85% to 99.4% probability of a 25basispoint cut this month .
Inflation is still on our radar , with August CPI due on September 11th , and nowcasts suggesting it remains above the Fed's 2% target .

(03:59):
Consumer sentiment is also weakening , indicating consumers are tightening their belts , prioritizing essentials over discretionary spending .
Finally , a judge's ruling that President Trump's