The S&P 500 and Nasdaq surged to record highs on Friday after weak August jobs data. The jobs report has increased investor confidence in potential interest rate cuts from the Federal Reserve.
At the opening bell, the Dow Jones Industrial Average (.DJI) climbed 89.3 points, or 0.20%, to 45,710.49. The S&P 500 (.SPX) advanced 24.1 points, or 0.40%, to 6,530.06, while the Nasdaq Composite (.IXIC) jumped 152.7 points, or 0.70%, to 21,860.44.
US job growth slowed significantly in August, with the unemployment rate rising to 4.3%, indicating a cooling labour market and strengthening the potential for the Federal Reserve to cut interest rates this month.
According to the Labour Department’s Bureau of Labour Statistics, nonfarm payrolls rose by just 22,000 in August, well below expectations, following a revised gain of 79,000 jobs in July.
Economists had forecast anywhere from no job growth to an increase of 144,000 positions.
The report comes amid other signs of labour market strain, including data earlier this week showing that, for the first time since the onset of the COVID-19 pandemic, there were more unemployed individuals than job openings in July.
Hiring momentum has slowed sharply, and economists largely attribute this to President Donald Trump’s trade policies and stricter immigration enforcement both of which have disrupted labour supply and business planning.
Trump’s tariffs have pushed the average US import duty rate to its highest level since 1934, sparking inflation concerns and contributing to the Federal Reserve’s recent decision to hold off on further rate cuts.
Although some uncertainty around trade policy has begun to ease with most tariffs now implemented, a recent US appeals court ruling deeming many of those duties illegal has added fresh instability for businesses.