US stocks slipped on Friday as Wall Street questioned whether the job market has slowed by just enough to get the Federal Reserve to cut interest rates or by so much that a downturn could be on the way.
- The Dow fell 220.43 points, or 0.5%, to 45,400.86, closing out the week down 0.3%.
- The S&P 500 fell 20.58 points, or 0.3%, to 6,481.50, ending the week up 0.3%.
- The Nasdaq composite fell 7.31 points, or less than 0.1%, to 21,700.39, finishing up 1.1% for the week.
A Labor Department report released Friday said US employers
hired fewer workers in August than economists expected. The government also said that earlier estimates for June and July overstated hiring by 21,000 jobs.
So far this year, the Fed has been more worried about the potential of inflation worsening because of President Trump's tariffs than about the job market. But the new job numbers could push the Fed to consider cutting rates in two weeks by a steeper amount than usual, said Brian Jacobsen, chief economist at Annex Wealth Management. "This week has been a story of a slowing labor market, and today's data was the exclamation point," said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.
Friday's heaviest weight was Nvidia, the chip company. It's been contending with criticism that its stock price charged too high, too fast and became too expensive following Wall Street's rush into AI, and it fell 2.7%. Lululemon dropped 18.6% after the yoga and athletic gear maker's revenue for the latest quarter fell short of analysts' expectations. CEO Calvin McDonald pointed to disappointing results from its US operation, while chief financial officer Meghan Frank said Lululemon is facing "industrywide challenges, including higher tariff rates."
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Still, more stocks rose than fell. Leading the way was Broadcom, which climbed 9.4% after reporting better profit and revenue for the latest quarter than analysts expected. Tesla rose 3.6% after proposing a payout package that could reach $1 trillion for CEO Elon Musk if the electric vehicle company meets a series of extremely aggressive targets over the next 10 years. Smith & Wesson Brands jumped 6.5% after the gun maker delivered better results for the latest quarter than analysts expected. CEO Mark Smith said it saw good demand for new products in what's usually a slow season for sales of firearms.
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