U.S. Stocks Mixed as Weak Jobs Report Fuels Rate Cut Bets and Economic Concerns
U.S. stock markets experienced a mixed session Friday as disappointing jobs data intensified worries about the economy and bolstered expectations for Federal Reserve interest rate cuts.
Energy stocks led decliners, with ExxonMobil and Chevron both falling more than 2.5%.Kenvue, the manufacturer of Tylenol, saw its shares plunge 9.3% following a Wall Street Journal report that Health Minister Robert Kennedy Jr. planned to link the painkiller to autism.The U.S. Bureau of Labour Statistics reported that non-farm payrolls increased by only 22,000 in August, significantly below the revised 79,000 gain in July and market forecasts of 75,000. The unemployment rate rose to 4.3%, an increase of 0.1 percentage point. June and July job numbers were revised downward by a combined 21,000.
“From today’s weak figures, the stock market is clearly worried that the economy is much worse than expected,” said Megan Horneman, chief investment director at Verdence Capital Advisors.
Traders are now largely pricing in an interest rate cut in September, with the futures market indicating approximately a 10% probability of a half-percentage-point reduction this month. Bank of America economist Aditya Bhave shifted expectations, now anticipating rate cuts in both September and December, citing worsening labor demand.
President Trump criticized Federal Reserve Chairman Jerome Powell, stating on social media, “Jerome is ‘too slow’ Powell should have cut interest rates long ago.As always,he is ‘too slow’ again!”
eric Teal,chief investment director at Comerica Wealth Management,cautioned that “It takes a lot of interest rate cuts to reactivate economic activity,because today’s economy is less sensitive to interest rates than before.”
