The S&P 500 edged slightly higher and the NASDAQ gained about 1% for the week, recouping the modest declines both indexes posted the week before. The Dow slipped fractionally for a second straight week, with all three major benchmarks holding just below recent record highs.
Friday’s jobs report reinforced signs of labor market weakness. August payrolls grew by only 22,000, well short of economists’ expectations of 75,000, while the unemployment rate climbed to 4.3%—the highest since 2021. In addition, June’s figures were revised down to show a loss of 13,000 jobs, the first monthly decline since 2020.
Bond markets had a volatile week as shifting views on interest rates and tariffs drove swings in yields. U.S. government bond prices ultimately moved higher, pushing yields lower. The 10-year Treasury yield, which touched 4.31% on Tuesday, fell back to 4.09% by Friday’s close.
Weak labor data boosted expectations for a rate cut at the Fed’s September 17 meeting. Futures markets as of Friday priced in an 86% probability of a quarter-point reduction and a 14% chance of a half-point cut, according to CME FedWatch.
Gold extended its rally for a third straight week, setting a new record high of $3,655 per ounce in Friday afternoon trading. The metal has gained more than 36% year to date, with much of the latest surge coming after the disappointing jobs report.
Global bond markets also saw turbulence. Yields on long-term debt in Japan and the U.K. rose sharply midweek on renewed concerns about sovereign debt risks. At one point Wednesday, the 30-year U.K. gilt yield reached its highest level since 1998.
U.S. mortgage rates tumbled following the jobs release. The average 30-year fixed rate dropped from 6.45% on Thursday to 6.29% on Friday—the steepest single-day decline since August 2024. Just four months ago, the average was still above 7.0%.
Looking ahead, Thursday’s Consumer Price Index will be a key data point for the Fed before its September policy decision. The prior CPI report showed inflation holding steady at a 2.7% annual rate in July.