Stocks Turn Mixed as US Job Growth Less Than Previously Stated

The S&P 500 Index ($SPX) (SPY) today is up +0.02%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.07%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.08%.  September E-mini S&P futures (ESU25) are down -0.08%, and September E-mini Nasdaq futures (NQU25) are down -0.07%. 

Stock indexes today fell back from early gains and turned mixed after the preliminary revision to US payrolls in the year through March showed the number of jobs was fewer than previously stated.  Stocks remain underpinned by the prospect of a more accommodative Federal Reserve, as the markets have fully priced in a 25 bp rate cut by the Fed at next week’s FOMC meeting and priced in a 10% chance for a 50 bp rate cut.  

M&A activity is also supporting stocks today after Anglo American agreed to acquire Teck Resources, creating a more than $50 billion company.  Also, Novartis AG is buying Tourmaline Bio for about $1.4 billion.

The preliminary benchmark payroll revisions to US payrolls in the year through March 2025 showed -911,000 fewer jobs than previously stated, a wider loss than expectations of -700,000 and the largest markdown in job growth since at least 2000, a sign of a weaker US labor market.

Market focus this week will be on any trade or tariff news.  On Wednesday, Aug PPI final demand is expected to climb +3.3% y/y, unchanged from July, and Aug PPI ex-food and energy is expected to ease to +3.5% y/y from +3.7% y/y in July.   On Thursday, Aug CPI is expected to climb to +2.9% y/y from +2.7% y/y in July, and Aug CPI ex-food and energy is expected to increase +3.1% y/y, unchanged from July. Also, weekly initial unemployment claims are expected to fall by -3,000 to 234,000.  On Friday, the University of Michigan Sep consumer sentiment index is expected to slip -0.2 to 58.0.

The markets are now pricing in a 10% chance of a 50 bp rate cut at the upcoming FOMC meeting on Sep 16-17, versus the previous expectations of a zero chance of that 50 bp rate cut.  After the fully expected -25 bp rate cut at the Sep 16-17 meeting, the markets are now discounting a 79% chance of a second -25 bp rate cut at the Oct 28-29 meeting, up from a 54% chance as of late Thursday.  The markets are now pricing in an overall -74 bp rate cut in the federal funds rate by year-end to 3.64% from the current 4.38% rate.

Regarding tariffs, a federal appeals court ruled late last month that President Trump exceeded his authority by imposing global tariffs without Congressional approval, but the court let the tariffs remain in place while appeals continue.  The US Court of Appeals for the Federal Circuit Court said, “The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax.” The case now appears to be headed to the Supreme Court for a final decision.  According to Bloomberg Economics, the average US tariff will rise to 15.2% if rates are implemented as announced, up from 13.3% earlier, and significantly higher than the 2.3% in 2024 before the tariffs were announced.

Overseas stock markets today are lower.  The Euro Stoxx 50 fell from a 1-week high and is down -0.02%.  China’s Shanghai Composite closed down -0.51%.  Japan’s Nikkei Stock 225 fell from a record high and closed down -0.42%.

Interest Rates

December 10-year T-notes (ZNZ5) are down by -7 ticks.  The 10-year T-note yield is up by +3.4 bp to 4.074%.  Supply pressures are weighing on T-notes as the Treasury will auction $119 billion of T-notes and T-bonds this week, beginning with today’s $58 billion auction of 3-year T-notes.  Losses in T-notes are limited after today’s larger-than-expected downward revision to annual US payroll growth, and last Friday’s weak US unemployment report boosted the chances to 100% for a 25 bp Fed rate cut at next week’s FOMC meeting.

Concerns about Fed independence are negatively impacting T-note prices due to President Trump’s attempt to fire Fed Governor Cook and Stephen Miran’s intention to hold a Fed Governor position while remaining technically in his White House role on the Council of Economic Advisors.

European government bond yields today are moving higher.  The 10-year German bund yield is up +2.2 bp to 2.664%. The 10-year UK gilt yield is up +1.9 bp to 4.625%.

French Jul manufacturing production fell -1.7% m/m, weaker than expectations of -1.2% m/m and the largest decline in 14 months.

Swaps are discounting no chance for a -25 bp rate cut by the ECB at Thursday’s policy meeting.

US Stock Movers

Albemarle (ALB) is down more than -10% to lead losers in the S&P 500 as lithium stocks retreat on a report from Chinese state media Securities Times that said CATL’s lithium mine, which had suspended production last month, will resume production soon.

SailPoint (SAIL) is down more than -8% after forecasting Q3 adjusted income from operations of $42.5 million-$43.5 million, weaker than the consensus of $50.4 million. 

Fox Corp (FOXA) is down more than -5% after trusts established for three of Rupert Murdoch’s children are selling 16.9 million shares of Class B stock. 

Home builders and home building suppliers are falling today on long liquidation and profit taking following the sharp rally in the stocks over the past three months.  Builders FirstSource (BLDR) is down more than -4%.  Also, PulteGroup (PHM), DR Horton (DHI), and Lennar (LEN) are down more than -3%, and Toll Brothers (TOL) is down more than -2%. 

News Corp (NWS) is down more than -3% after announcing it will offer 14.1 million shares of Class B common stock. 

Dell Technologies (DELL) is down more than -2% after announcing that CFO McGill is stepping down immediately.

Energy producers and energy service providers are climbing today, with WTI crude oil up more than +1%.  Valero Energy (VLO) is up more than +3%.  Also, Phillips 66 (PSX), Marathon Petroleum (MPC), ConocoPhillips (COP), and Exxon Mobil (XOM) are up more than +2%.  In addition, Schlumberger (SLB), Chevron (CVX), Occidental Petroleum (OXY), Haliburton (HAL), Devon Energy (DVN), Diamondback Energy (FANG), and are up more than +1%.

Tourmaline Bio (TRML) is up more than +57% after Novartis AG agreed to buy the company for $1.4 billion or about $48 a share. 

Nebius Group NV (NBIS) is up more than +41% after announcing it will provide Microsoft access to GPU infrastructure capacity at its new data center in Vineland, New Jersey, over the next five years. 

Brighthouse Financial (BHF) is up more than +9% after the Financial Times reported that Aquarian Holdings is in late-stage talks with two Middle Eastern investors to finance a takeover of the company. 

UnitedHealth Group (UNH) is up more than +4% to lead gainers in the S&P 500 and Dow Jones Industrials after saying it expects 78% of its Medicare Advantage members to be in highly rated 4-star or higher plans that earn bonus payments next year. 

Atlassian Corp (TEAM) is up more than +4% to lead gainers in the Nasdaq 100 after announcing it is ending its data center product over the coming three years and will move customers to its cloud platform.

CoreWeave (CRWV) is up more than +4% after launching CoreWeave Ventures, a new initiative committed to backing founders and companies developing platforms and technologies shaping the AI ecosystem.

Earnings Reports(9/9/2025)

Core & Main Inc (CNM), GameStop Corp (GME), Oracle Corp (ORCL), Rubrik Inc (RBRK), SailPoint Inc (SAIL), Synopsys Inc (SNPS).