Stock Prices Surge with Improved Prospects after Dismal US Employment Data Strengthens Argument for Multiple Federal Interest Rate Reductions

In today's global market recap, a mix of economic data, corporate earnings, and policy decisions have shaped the trading landscape.

The European 10-year German bund yield experienced a significant drop, falling 5.3 basis points (bp) to 2.666%. Simultaneously, the European 10-year UK gilt yield also saw a decrease, dropping 6.4 bp to 4.656%. These moves suggest a growing appetite for safe-haven assets amidst economic uncertainties.

In the United States, the markets are pricing in a 17% chance of a 50 bp rate cut at the upcoming FOMC meeting on Sep 16-17. This decision comes as the US unemployment rate rose by 0.1 point to a 3.75-year high of 4.3%, and average hourly earnings rose by 0.3% m/m.

Stocks are trading higher on today's weak US payroll report, with the S&P 500 Index up 0.83% and the Dow Jones Industrials Index up 0.77%. The Nasdaq 100 Index is up 0.93%, with Tesla (TSLA) leading the pack with a 3.7% gain following the announcement of a potential $1 trillion pay deal for Elon Musk. Homebuilders also climbed, supported by a fall in the 10-year T-note yield to a 5-month low.

Meanwhile, the tech-heavy Nasdaq was boosted by Broadcom (AVGO), which rose more than 11% on an agreement with OpenAI to design and produce a new AI chip. Crypto stocks also saw a rally today, driven by Bitcoin's (^BTCUSD) 2.3% increase.

However, not all sectors fared well. Lululemon Athletica (LULU) saw a significant drop of over 16% after reducing its guidance.

In policy news, a federal appeals court ruled that President Trump exceeded his authority by imposing global tariffs without Congressional approval. The case, currently under review by the D.C. Circuit Court of Appeals, may ultimately reach the U.S. Supreme Court.

The US Bureau of Labor Statistics announced technical difficulties that might cause some data to be delayed, adding to the uncertainty in the market.

Looking ahead, significant developments are expected around October 14, 2025, as the D.C. Circuit Court of Appeals continues to review the case regarding the tariffs. Additionally, several companies—including ABM Industries Inc (ABM), C&F Financial Corp (CFFI), Ermenegildo Zegna NV (ZGN), KalVista Pharmaceuticals Inc (KALV), Louisiana-Pacific Corp (LPX), National Beverage Corp (FIZZ), Pathward Financial Inc (CASH), Pro-Dex Inc (PDEX)—are set to release their earnings reports.

Stock Prices Surge with Improved Prospects after Dismal US Employment Data Strengthens Argument for Multiple Federal Interest Rate Reductions