Stocks Slip as Jobs Weakness Raises Rate-Cut Odds; Oil Falls, Gold Climbs

U.S. stocks ended lower Friday, capping a volatile week as investors digested a weak August jobs report, falling oil prices, and shifting expectations for Federal Reserve policy later this month.

The Dow Jones Industrial Average shed 220.18 points, or 0.48%, to 45,401.10. The S&P 500 declined 20.56 points, or 0.32%, to 6,481.52, while the Nasdaq Composite edged down 7.30 points, or 0.03%, to 21,700.40. The Russell 2000, a gauge of small-cap stocks, bucked the trend with a modest gain of 1.15 points, or 0.49%, to 237.74.

Weak Jobs Report Heightens Fed Cut Bets

The session’s tone was set by a sharply weaker-than-expected August employment report. Nonfarm payrolls rose by just 22,000, well short of the 75,000 forecast, while the unemployment rate ticked up to 4.3%Article Build - Google Docs. Revisions also showed June suffered the first net job loss since 2020, with three-month average payroll gains slowing to 29,000—the weakest since the 2008 financial crisis.

“This report printed weak at 22k vs. 75k expected and the unemployment rate ticked up to 4.3%,” said Jay Hatfield, CEO and CIO at Infrastructure Capital Advisors. He added that the Federal Reserve is likely to respond aggressively: “The current Fed is dominated by labor economists who are very focused on the weakening in the job market, which will motivate them to cut rates.”

Futures markets now assign near-certainty—99% odds—of a rate cut at the Fed’s September 17 meeting.

Commodities Diverge: Oil Tumbles, Gold Advances

Commodities painted a starkly different picture. U.S. crude oil futures for October delivery fell 2.32% to $62.01 a barrel, sliding steadily through the day before stabilizing in afternoon trading. Energy markets have been under pressure from concerns about slowing global demand, with crude ending the week at its lowest level in weeks.

In contrast, gold surged, with December futures settling up 1.11% at $3,646.70 an ounce. The precious metal’s rise underscored investor demand for safety amid weakening labor data and expectations of looser monetary policy.

September Headwinds Loom

Investors are also weighing seasonal dynamics as September begins. “Stocks have a well-established history of losing ground in September,” noted Mike Dickson, Head of Research at Horizon Investments, pointing out that the S&P 500’s average September return over the past decade is -1.8%, the weakest of any month.

Still, Dickson noted that strong recent GDP growth, robust earnings, and an expected Fed rate cut could provide support, though risks include elevated valuations and a narrow group of stocks driving much of the market’s gains.

Market Breadth and Technicals

Market breadth showed mixed signals Friday. Roughly 52% of listed stocks advanced on the day versus 45% declining, while new 52-week lows outpaced highs. The S&P 500 remains above its 50-day moving average but below its 200-day level, signaling lingering caution among technical traders.