Closing Recap

Friday, September 05, 2025

U.S. stocks reversed course this morning, pulling back after hitting another fresh intraday all-time high as investors took in a softer-than-expected jobs report, with imminent interest-rate cuts seen as certain after this week’s run of weak labor data. The US economy added just 22,000 jobs in August, well short of expectations for 75,000 and adds more evidence to the narrative of a dramatically slowing US labor market. The unemployment rate rose to 4.3%, compared with 4.2% the previous month. The revisions also showed a negative print in June, the first labor market shrinkage since 2020. Traders are now pricing in a 100% chance of a reduction, and bets are rising on a larger 50-basis-point cut. The dollar sunk along with Treasury yields following the data, while gold hit a record high.

In stock news there were 4 big stories: 1) AVGO was the top story overnight after earnings beat and guidance was solid but it was news of a new $10B AI customer (speculated as OpenAI) that sent shares surging and pushed rival AI chip makers NVDA, AMD lower; 2) LULU shares cratered in retail, extending its year-to-date losses after a weak quarterly results and slashed its outlook; 3) interest rate sensitive stocks/sectors shined following the pullback in Treasury yields/mortgage rates after weaker August jobs data, lifting Smallcaps, Housing, Biotech (XHB, XBI both 2025 highs today) and others; 4) KVUE shares tumbled later day following a WSJ report that HHS Secretary Kennedy Jr. plans to link pregnant women’s use of the pain killer Tylenol to autism. There were also several stocks up on earnings, but those headlines dominated market action most of the day.

Macro Calendar next week: there are a few key events next week before the FOMC policy meeting headlines the week of 9/15: Last major inflation data next week before the Fed meeting with Aug PPI on Wednesday 9/10 and Aug CPI on Thursday 9/11. Apple (AAPL) is holding its product event on Tuesday 9/9. The European Central Bank (ECB) Announcement in next Thursday (9/11). European CPI readings on Friday 9/12. Also, the Wall Street conference calendar remains heavy with GSCO Tech Conference, HC Wainwright Global investment, Piper Growth Frontiers Conference, Barclay’s Financial Conference, Roth Solar & Storage Symposium among them.

• August average hourly earnings all private workers +0.3% from prior month (cons +0.3%) while August average hourly earnings +3.7% from year earlier (consensus +3.7%)
• U.S. August labor force participation rate 62.3%; U-6 underemployment rate just ticked up to 8.1% in August, matching the highest level since Oct 2021; U.S. August unemployment rate 4.3% (in-line with consensus 4.3%). The unemployment rate for 16–24-year-olds is now at 10.5%
• Zerohedge tweets: "It gets worse: all jobs’ gains were part time: Full-time jobs: -357K; Part-time jobs: +597K"

• Oil prices declined as a weak jobs report dimmed the outlook for energy demand in the U.S., while swelling supplies may grow further after OPEC and allied producers meet over the weekend. WTI crude fell -$1.61 or 2.54% to settle at $61.87 per barrel while Brent fell -$1.49 to $65.50. On Wednesday, Reuters reported that the eight members of OPEC will consider raising production further at a meeting on Sunday. U.S. crude inventories rose 2.4 million barrels last week, rather than falling as analysts expected. U.S. natural gas futures slipped, ending a seven-session string of small gains that recovered the key $3 level.
• The U.S. dollar fell back to its lowest levels since July, while the euro edged back above 1.175 before paring gains late day. At the same time Treasury yields tumbled, with the 10-yr hitting its lowest levels since April, falling -9-bps today to 4.08%, the 2-yr falls -8.5bps to 3.50% and the 30-yr falls about -10bps to 4.77% (off highs above 5% earlier this week). The weaker jobs data has raised expectations of rate cuts beyond the widely expected September meeting adjustment.

• In Broadlines: COST reported an August US comp increase of 6.7% (ex. gas). US comp trends remained essentially stable on a six-year stacked basis and accelerated 60 bps on a two-year stacked basis. The company continues to see broad-based momentum across all key categories.
• In Autos: TSLA’s board has proposed a new compensation plan for CEO Elon Musk, valued at about $1 trillion upon achieving certain lofty targets. The plan is expected to be tied to ambitious performance milestones, including growth in AI-driven products and autonomous systems.

• In Building Products/Construction Supplies: NX shares declined after mixed Q3 results (EPS missed/revs beat) while lowers FY25 revenue view to $1.82B from $1.84B-$1.86B (vs. est. $1.85B) and lowers FY25 adjusted EBITDA view to $235M from $270M-$280M.

• In Package Delivery: JP Morgan said they are taking a negative view on FDX into the earnings release on September 18 as it sees downside risk to FQ126 results from stagnant B2B demand, worsening B2C trends and mounting tariff pressures which should create a lower base to start the year and set negative sell-side earnings revisions in motion.
• In Paper & Packaging: CCK was upgraded to Buy from Hold at Truist and maintain its $118 PT given the stock’s attractive entry point due to recent notable weakness and North America volume growth prospects in 2026. Trust noted since August 28, Crown Holdings shares have declined ~7.8% and as a result of the sell-off, the stock is now trading at ~8.1x 2026 EBITDA vs an average 9.5x over the last five years.
• In Solar: Shares of solar stocks DQ, CSIQ, JKS, SEDG, among others higher as China’s efforts to combat deflation showed signs of success, leading to a gradual price recovery in the solar sector. Solar wafer prices continued to extend their gains, providing a positive backdrop for companies across the solar supply chain.
• In Industrials: FAST reported its August sales results today, September 5, 2025. Fastenal’s August net sales were $696.71M, up 6.7% from the previous year, with daily sales increasing by 11.8% to $33.18M. ABM shares fell after Q3 adj EPS $0.82 missed the $0.95 consensus and said expects to be toward the lower end of its FY adj EPS range of $3.65-$3.80 and adjusted EBITDA margin range of 6.3%-6.5%, principally reflecting higher than anticipated interest expense and the previously mentioned margin dynamics.
• In Energy: Energy prices and stocks were lower most of the day and wee, tracking a decline in crude prices which posted a weekly loss for the first time in three weeks, as expectations grow of higher supply at OPEC+ meeting this weekend and a surprise increase in U.S. crude inventories added to demand concerns. HAL has been cutting staff in recent weeks, Reuters reported, marking the latest workforce reduction in the U.S. oil industry as it faces rising costs and a period of lower prices and volatility.
• In Defense: President Trump is preparing to reinterpret a decades-old arms control treaty to allow wider international sales of advanced U.S. military drones, Reuters’ reported. The change could approve Saudi Arabia’s request for over 100 MQ-9 "Reaper" drones, part of a larger $142B arms deal, while also opening sales to allies in Europe and the Pacific

• In Brokers & Exchanges: notable weakness in banks (JPM, C, WFC, BAC), as well as SCHW, IBKRNo specific headlines or news to account for the weakness in financials, especially given the view that a lower interest rate environment is generally seen as positive for banks/lenders (though the weak jobs data is overall not a positive for the economy, so could have impacted the space).
• In Asset Managers: BEN releases monthly AUM data overnight reported preliminary month-end assets under management (AUM) of $1.64 trillion at August 31, 2025, compared to $1.62 trillion at July 31, 2025. This month’s AUM reflected the positive impact of markets partially offset by preliminary long-term net outflows of $3B, including the funding of a $6B fixed income mandate. Preliminary long-term net outflows also include $7B of long-term net outflows at Western Asset Management.

• In Healthcare Technology: PHR shares fell after Q2 revenue and adjusted EBITDA both came in higher than consensus, however, management reiterated its FY26 revenue guide and only raised the adjusted EBITDA target by the ~$2M beat vs consensus this quarter; also announced it had entered into an agreement to acquire AccessOne

• DOCU reported better-than-expected FQ226 results, with non-GAAP EPS of $0.92 (consensus 0.84) on revenue of $801M (consensus $780M), up 9% y/y, up from 8% growth last quarter; billings of $818M (consensus $764M), up 13% y/y, bouncing back nicely from 4% last quarter and above the consensus of 5%.
• GWRE reported a strong Q4 with broad-based beats and continued cloud execution, closing FY25 with ARR surpassing $1B (+19% YoY cc), subscription revenue up 33% YoY, and subscription GM reaching 70%; FY26E ARR guidance was above consensus (16-17% y/y ex-FX vs Street: ~15%) and investor expectations (~16%).
• IOT posted Q2 results and guidance that topped expectations; for the period ending Aug. 2, Samsara said it earned an adjusted $0.12 per share as revenue surged 30.4% Y/Y.
• PATH reported good F2Q results, posting modest ARR beat and raising its FY26 ARR guide by more than its F2Q outperformance to ~10.2% y/y growth. Notably, the Company saw stabilization within U.S. PubSec, good traction among its AI and Agentic products, and FX tailwinds.
• TTAN reported very strong F2Q results, beating by 5.5% on the top line, driven by better new customer growth and greater GTV. The full-year guide was raised by more than the quarterly outperformance, which now implies 21.5% growth, and has improved by 490 bps since FY26 guidance was initially set.

• ASML was upgraded to Buy from Neutral at UBS and raised tgt to €750 from €660 saying following a year of underperformance with the stock down c20%, UBS sees the declining lithography intensity thesis and overhang from the Chinese market as well understood by the market.
• Alphabet’s GOOGL Google was hit with a 2.95-billion-euro ($3.45 billion) EU antitrust fine on Friday for anti-competitive practices in its lucrative AdTech business, marking its fourth penalty in its decade long fight with EU competition regulators