Market Recap - Week of September 1 through September 5, 2025
- Gordon Achtermann, CFP®, CSRIC®, MBA
- Sep 9
- 3 min read
The S&P 500 index edged up 0.3% this week as investors considered the potential effects of weaker-than-expected monthly payroll data.
The S&P 500 ended the week at 6,481.50. The week's move came in just four sessions as the US stock market was closed on Monday for Labor Day. The index is now up 10% for the year.
The August employment report Friday morning showed nonfarm payrolls rose by 22,000, well below the 75,000 increase expected in a survey compiled by Bloomberg. While July payrolls had an upward revision to a 79,000 increase, June payrolls were revised downwards to a 13,000 decrease, resulting in a net downward revision of 21,000 jobs.
The unemployment rate rose to 4.3% in August from 4.2% in July, as expected, while the labor force participation rate rose to 62.3% from 62.2% in the previous month and the size of the labor force expanded on gains in both employment and unemployment.
While the weaker-than-expected payrolls added to investors' concerns about the economy, it also prompted some to increase their bets on the likelihood the Federal Reserve's monetary committee will resume cutting interest rates at its September meeting.
Google parent Alphabet had the largest percentage gain in communication services, climbing 10%, as the company received a favorable court ruling allowing it to retain control of its Chrome browser. The ruling has "strengthened" the company's position in generative artificial intelligence and reduced near-term regulatory risk to its core business, Tigress Financial Partners said in a Friday note.
Economic data will feature the August Producer Price Index and Consumer Price Index, two closely watched inflation measures.
Last Week’s Economic Reports
JOLTS job openings fell to 7.18 million
Nonfarm payrolls rose by 22,000
ISM PMI (purchasing manager's index) improved to 48.7 (manufacturing) and 52.0 (services)
S&P 500 Sector and Stylebox Returns
Thought of the Week
Early each month, the BLS releases a slew of labor market indicators that are scrutinized by investors. The most prominent is the Employment Situation (“Jobs”)Report, which recently showed the U.S. economy added just 22k payroll jobs in August. Although crucial, its data are volatile and subject to large revisions, and revisions scheduled for later this week could reveal that ~875k fewer payroll jobs were created during the 12 months ended March 2025 than initially reported. This serves as a reminder that signals from any single data point can be murky. Instead, investors should use the broader basket of indicators to inform their view of the labor market.
Other data released last week all told a similar story: the labor market is slowly eroding. Policy uncertainty has weighed on labor demand, and the job openings-to-unemployed worker ratio fell to 0.99 in July. This is the first time since April 2021 that there has not been at least one job opening for each unemployed worker. While this ratio remains above its 2015-2019 average, it is well below its post-COVID peak of 2.01. Elsewhere, initial jobless claims ticked higher but remain low relative to history, while ADP private payrolls rose by 54k in August, down from 2024’s average of 144k.
With downsides to employment growing more apparent, a September rate cut is all but certain, while an October cut also looks more likely. However, with tariffs still making their way through the inflation data and fiscal stimulus likely to complicate the outlook, the Fed finds itself in an unenviable position. While the labor market will receive greater focus, the FOMC should continue to stress its data dependency. Any economic surprises, in either direction, could spark a sharp repricing and another bout of interest rate volatility.
Source: JP Morgan (edited)
Up Next
Economic data out later this week will feature the August producer price index and consumer price index, two closely watched inflation measures, and consumer sentiment numbers.
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All the Best,
Gordon Achtermann, CFP®
703-573-7325
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