The Mid-Day Buzz
September 5th, 2025
Stocks hit fresh highs as bond yields sink on soft jobs data.
U.S. equities are rallying to record levels Friday after weaker-than-expected employment data bolstered bets on Federal Reserve rate cuts.
A labor market that’s cooling but not collapsing strengthens the case for lower rates, which could support growth and corporate profits. Adding to the upbeat tone, tech shares are surging: Broadcom jumped 15% after posting better-than-expected earnings and disclosing a $10 billion customer widely speculated to be OpenAI.
The S&P 500 fell 0.6%, backing off the all-time closing high hit on Thursday, while the Dow Jones Industrial Average lost 0.6%. The tech-heavy Nasdaq Composite slid roughly 0.4%. The declines mark a pullback from sizable gains earlier in the session.
Economic Takeaways:
- Two-year Treasury yields—highly sensitive to near-term Fed policy—dropped to their lowest point in three years, while the 10-year yield slipped to 4.07%.
- The dollar also weakened, fueling a classic “bad news is good news” reaction among investors.
- Gold futures (/GC) traded above $3,600 per ounce on Thursday, an all-time high. They’re up sharply from recent lows below $3,400 amid growing global fiscal concerns and uncertainty around U.S. tariffs. Gold is up nearly 40% year-to-date, driven by bets on an imminent Federal Reserve rate cut at this month’s policy meeting.
Hiring slows further, reinforcing Fed-cut hopes.
The U.S. economy added just 22,000 jobs in August versus forecasts for 75,000, while the unemployment rate ticked up to 4.3% from 4.2%. Combined with downward revisions to the prior two months—including June’s first monthly job loss since 2020—the data show scant employment growth over the past four months. Manufacturing payrolls fell by 12,000, though health care and leisure & hospitality continued to add workers.
Other signs of easing labor demand included shorter hours and slower wage gains, now 3.7% versus 3.9%. With immigration still low, the economy may need fewer new jobs to keep unemployment steady. Bond traders now fully price in a September rate cut and expect the fed funds rate to drop below 3% by the end of next year.
Payrolls report: a deeper look.
June’s nonfarm payrolls were revised down by 27,000, showing a loss of 13,000 jobs rather than a gain. July’s figures were revised up by 6,000. These adjustments come on the heels of a much larger change to the July report, when the government cut a combined 258,000 jobs from May and June data. (President Trump dismissed BLS Commissioner Erika McEntarfer on Aug. 1, the day the report was released.)
Long-term unemployment is also rising: 25.7% of job seekers have been out of work for 27 weeks or more. Average hourly earnings increased 0.3% month over month and 3.7% year over year. Health services led job creation with 46,000 new positions in August, while durable goods and business services posted losses. Manufacturing payrolls dropped by 12,000, marking a fourth straight month of contraction—the longest stretch since early 2020.
Broadcom Adds Nearly $140 Billion In Market Value As Investors Bet On AI Payoff
Broadcom (AVGO) surged on Friday, adding about $138.5 billion to its market capitalization in intraday trading after reporting third-quarter results that easily topped Wall Street forecasts. The AI-focused chipmaker also announced it had secured a $10 billion order from a new artificial intelligence customer — reportedly OpenAI — prompting the company to lift its revenue forecast for its AI-related business.
The stock touched an intraday record high of $356.24 before paring gains to trade above $330 by early afternoon. With the rally, Broadcom’s market value climbed to roughly $1.6 trillion, underscoring growing investor enthusiasm for its position in the booming AI chip market.
By contrast, rival Nvidia (NVDA) — still the world’s most valuable company at over $4 trillion — shed $160.6 billion in market cap as its shares fell 3.6% on Friday. Advanced Micro Devices (AMD) stock also slumped, down nearly 6.8% intraday.
Bank of America analyst Vivek Arya cautioned that Nvidia shares could face near-term pressure as Broadcom gains ground in AI chips but added that “the AI pie could just be getting bigger,” suggesting there may be room for multiple winners in the fast-growing market.
On the Move
- Broadcom (AVGO) jumped nearly 11% after beating earnings expectations. The company disclosed it’s working with ChatGPT maker OpenAI to design and build an AI chip that could rival Nvidia’s (NVDA).
- Alphabet (GOOG) is looking to extend its 9.5% rally as its market cap approaches $3 trillion. Shares surged Tuesday after a favorable antitrust ruling but were slightly lower in pre-market trading.
- Tesla (TSLA) asked shareholders to approve a new $1 trillion pay package for CEO Elon Musk, tied to a series of tough performance targets over the next decade that could lift his stake to 25%.
- Lululemon (LULU) slid nearly 20% pre-market after issuing weaker-than-expected earnings guidance.
- Bitcoin futures (/BTC) gained 2.4% in early trading as the cryptocurrency tests support near the $110,000 level.
What’s Ahead
Inflation is in focus ahead of Fed meeting. After this jobs report, it would take a major upside surprise to derail a quarter-point cut later this month.
Next week’s inflation print—likely the last key data before the Fed’s Sept. 17 meeting—remains crucial. Headline CPI is projected to edge up to 2.9% from 2.7%, the highest since January, partly due to base effects. Core inflation should hold at 3.1%. While tariffs could add price pressures later, many companies are still absorbing initial costs. Goods inflation makes up just 25% of core CPI versus 75% for services, so continued disinflation in services could help restrain broader price pressures.
Following this week’s hearing on President Trump’s Fed nominee Stephen Miran, attention is shifting to potential action on cryptocurrency regulation. The House passed the CLARITY Act in July, establishing a broad framework for digital assets. The Senate Banking Committee has signaled it will take up the Senate’s version of the bill later this month.
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