The Report That Sealed the Fed’s Hand

August’s jobs report delivered a whisper of weakness: just 22,000 new payrolls, rising unemployment, and downward revisions that suggest a labor market losing steam. Yet in the alchemy of Wall Street, what looks like softening for workers is transmuted into relief for investors, who see in the slowdown not danger but the near certainty of cheaper money.

The monthly jobs report is not a national pastime, but for markets it might as well be scripture. Traders, economists, and policymakers scrutinize each line of the release for signs of strength or weakness, knowing that a few thousand jobs gained, or lost, can tilt the course of monetary policy. The consequences ripple outward into mortgage rates, stock prices, and even the chances of landing the next paycheck.

This Friday, the ritual was briefly interrupted by the Bureau of Labor Statistics, which announced technical difficulties before publishing its latest figures. Traders, already pacing in anticipation, leaned on futures markets as a kind of oracle while they waited for the numbers that would dictate, or at least appear to dictate, the Federal Reserve’s next move. When the report finally arrived, the verdict was unmistakable: the American labor market has lost momentum. Payrolls rose by just 22,000 in August, far short of the seventy-five thousand economists had expected. Prior months were revised down by twenty-one thousand jobs, and unemployment ticked up to 4.3%, its highest level in nearly three years.

It is the kind of data that speaks in whispers rather than shouts. The economy is not collapsing, but it is clearly cooling. In another era, such a meager jobs gain might have set off alarm bells about a looming recession. Today, the response was different. Futures on the S&P 500 and the Nasdaq 100 nudged higher. The Dow slipped modestly, but the broader market seemed almost relieved. Bad news for workers, in this peculiar logic, is good news for Wall Street. The weaker the labor market looks, the stronger the case for the Federal Reserve to cut interest rates – and the more certain investors feel that cheaper money is on its way.

The Fed, which often acts as an anxious parent deciding whether to loosen the allowance or hold firm, now finds itself with ample justification for generosity. Markets had already priced in a September cut with near total confidence. Today’s report all but seals the deal. The rise in unemployment, the anemic hiring, the downward revisions: together they form a picture that argues less for caution than for action. For Jerome Powell, the message is simple: do it, and soon.

If monetary policy supplied the day’s suspense, corporate news isn’t slow. Broadcom, the chipmaker, surged after forecasting that artificial-intelligence revenue would “improve significantly” in 2026. The promise of profits not yet earned sent the stock up by double digits before the market even opened. This enthusiasm was made more notable by the recent disappointment surrounding Nvidia, whose earnings failed to live up to its own stratospheric valuations. For now, Broadcom has taken up the role of savior, offering the market a fresh reason to believe in the endless monetization of machine intelligence. Lululemon, by contrast, saw a fifth of its value vanish after yet another cut to its profit outlook, dragging Nike along with it.

Elsewhere, Tesla floated a trillion-dollar compensation package for Elon Musk, contingent on targets that make the labors of Hercules look modest.. Cryptocurrency stocks rose as bitcoin touched a one-week high. By Thursday’s close, the S&P 500 had already logged a fresh record, shrugging off the seasonal curse of September as if to prove that almanacs are for farmers, not financiers.

From Frankfurt to New York, from Hong Kong to Sydney, equity markets joined in the cautious celebration. The world has entered a strange suspended animation, in which traders no longer ask whether easing will occur, but how much they can profit from its inevitability.

In Asia-Pacific, the main markets followed in the footsteps of their Western counterparts, with the exception of India, which lost some ground. Japan, mainland China and Hong Kong posted gains of around 0.8%. South Korea was up just 0.2%, while Australia gained 0.5%. The rebound at the end of the week should allow the MSCI AC Pacific index to post a positive weekly balance. European markets are bullish, with the Stoxx Europe 600 up 0.3%.

Today’s economic highlights:

On today’s agenda: household spending in Japan and factory orders in Germany; in France, the current account balance and trade balance will be released; in Canada, the hourly wage rate for permanent employees year-over-year; in the United States, non-farm payroll changes and the unemployment rate. See the full calendar here.

• Dollar index:97,960
• Gold: $3,549
• Crude Oil (BRENT): $66.55 (WTI) $62.99
• United States 10 years: 4.11%
• BITCOIN: $112,450

In corporate news:

• Tesla proposed an unprecedented $1 trillion performance-based compensation package for CEO Elon Musk, contingent on meeting targets like reaching a market cap of $8.6 trillion and mass production of robotaxis and humanoid robots.
• Broadcom shares surged after it secured over $10 billion in AI chip orders from a new customer, rumored to be OpenAI, signaling strong future AI revenue growth. It reported above-estimate Q4 revenue forecasts and exceeds expectations in Q3 profit and sales growth.
• Lululemon Athletica slashed its full-year forecast and reported soft U.S. demand and higher tariffs, sending shares down 19% premarket.
• Qualcomm and BMW launched a Snapdragon-powered automated driving system with hands-free features, debuting in the BMW iX3.
• Fiserv acquired full ownership of AIB Merchant Services to expand its payment solutions across Europe.
• Samsara reported better-than-expected Q2 earnings and raised its full-year guidance, sending shares up over 10%.
• Starbucks’ China business was valued at up to $5 billion by potential bidders as the company explores selling a minority stake.
• BioNTech announced that its breast cancer drug candidate met the primary endpoint in a phase 3 trial, outperforming Roche’s existing treatment.
• Anthropic, backed by Amazon, blocked access to its services for Chinese-owned firms over national security concerns.
• Warner Bros. Discovery sued AI startup Midjourney for allegedly generating unauthorized content using DC Comics characters.
• JPMorgan and MUFG are leading a $38 billion debt package to fund AI-focused data centers for Oracle, linked to its expanded deal with OpenAI.
• Apple’s India sales rose to $9 billion, fueled by iPhone and MacBook demand and new store openings in the country.
• Dabur launched a nationalistic ad campaign targeting Colgate-Palmolive, urging consumers to choose Indian-made toothpaste amid rising US-India trade tensions.
• Cadence Design Systems acquires Hexagon’s design and engineering business for approximately $3.16 billion.

Analyst Recommendations:

• Alphabet Inc.: Baptista Research upgrades to outperform from hold and raises the target price from USD 222 to USD 271.
• Broadcom Inc.: CTBC Securities Investment Service Co LTD upgrades to add from neutral and raises the target price from USD 268 to USD 350.
• Ciena Corporation: B Riley Securities Inc. downgrades to neutral from buy and raises the target price from USD 90 to USD 113.
• Lululemon Athletica Inc.: William Blair downgrades to market perform from outperform.
• Nisource, Inc.: Jefferies downgrades to hold from buy and reduces the target price from USD 48 to USD 44.
• Ciena Corporation: B Riley Securities Inc. downgrades to neutral from buy and raises the target price from USD 90 to USD 113.
• Humana Inc.: Bernstein maintains its outperform recommendation and raises the target price from USD 269 to USD 341.
• Lucid Group, Inc.: Cantor Fitzgerald maintains its neutral recommendation and raises the target price from USD 3 to USD 20.
• Molina Healthcare, Inc.: Bernstein maintains its outperform recommendation and reduces the target price from USD 284 to USD 220.
• Nvidia Corporation: First Shanghai Securities maintains its buy recommendation and raises the target price from USD 170 to USD 215.
• Roku, Inc.: Baird maintains its outperform rating and raises the target price from USD 90 to USD 110.
• Strategy Incorporated: President Capital Management Corp maintains its buy recommendation and reduces the target price from USD 553 to USD 389.

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