Ross Stores, Urban Outfitters, Zumiez, Camping World, and Kohl's Stocks Rise Amid Interest Rate Cut Hopes

Several retail stocks, including Ross Stores, Urban Outfitters, Zumiez, Camping World, and Kohl's, surged after the US economy added only 73,000 jobs in July, short of the 110,000 expected by economists. This led to a rise in the probability of a September interest rate cut, boosting investor confidence in the sector's outlook. Lower interest rates can stimulate the economy and lead to increased spending on discretionary items.

The U.S. stock market experienced its worst day since May on Friday, with the S&P 500 falling 1.6%, the Dow Jones Industrial Average dropping 1.2%, and the Nasdaq composite declining 2.2% [1]. The market's downturn was primarily driven by two significant developments: a sharp slowdown in hiring and President Donald Trump's announcement of sweeping tariffs on imports from various U.S. trading partners.

The government reported that employers added just 73,000 jobs in July, far below the 110,000 expected by economists. This figure was further revised downwards, with 258,000 jobs removed from the May and June payrolls [1]. The weak hiring numbers fueled concerns about a weakening economy and increased the likelihood of a September interest rate cut by the Federal Reserve.

The Federal Reserve's odds of a quarter-point cut in September rose to around 87% from just under 40% a day earlier, according to data from CME FedWatch [1]. The yield on the 10-year Treasury fell to 4.21% from 4.39% just before the hiring report was released, reflecting the market's expectations for a rate cut [1]. The Fed's cautious approach to cutting rates is partly due to concerns about tariffs adding fuel to inflation and weighing down economic growth [1].

Several retail stocks, including Ross Stores, Urban Outfitters, Zumiez, Camping World, and Kohl's, surged following the weak job growth report. Lower interest rates can stimulate the economy and lead to increased spending on discretionary items, boosting investor confidence in the sector's outlook [1]. For instance, Ross Stores rose by 6.2% and Urban Outfitters gained 4.5% on Friday [1].

Investors are now closely watching the Federal Reserve's decision-making process. The resignation of FOMC member Adriana Kugler opens the door for a more dovish Fed shift, potentially leading to a rate cut [2]. The Fed has held rates steady since December, but recent data suggests a growing likelihood of a cut to support the economy and job market [2].

As the market opens this week, investors are digesting the implications of the weak job growth report and the upcoming Fed meeting. The S&P 500 and Nasdaq are down 1.6% and 2.24% respectively, while European markets are mixed [2]. The probability of a September rate cut has surged to 87%, with market pricing for cuts by year-end rising from 18 basis points to 41bps [2].

References:
[1] https://abc7chicago.com/post/stock-market-today-wall-street-slumps-bond-yields-sink-following-weak-hiring-numbers-new-tariffs-live/17393999/
[2] https://fortune.com/2025/08/04/labor-department-data-fed-interest-rate-cut/