The main U.S. equity indexes opened up and trended higher through the last trading session before a badgered and beleaguered Bureau of Labor Statistics releases its August jobs report before Friday’s opening bell.
Investors, traders and speculators looked beyond a couple of disappointing earnings reports from high-profile software makers and instead turned to incoming economic data.
“Tomorrow’s jobs report will be the deciding factor,” notes E*TRADE from Morgan Stanley Managing Director Chris Larkin, “but so far this week the data is confirming a slowdown in the labor market.”
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Larkin says “markets may embrace that data” in the short term “because it should increase the odds of Fed rate cuts.” At the same time, he adds, “If the numbers deteriorate too much, it could raise concerns about the health of the economy.”
Meanwhile, with the trajectory of interest rates and the impact of tariffs on inflation still uncertain ahead of the next Fed meeting, the yield on the 2-year U.S. Treasury note dipped to 3.586% compared to 3.612% as of Wednesday’s closing bell. The yield on the 30-year U.S. Treasury bond ticked down to 4.856% vs 4.892%.
Gold futures traded as high as $3,621.60 today, up from $3,593.20 as of Wednesday, and were trading near all-time highs above $3,600 late Thursday. The U.S. Dollar Index (DXY) rose to 98.29 from 98.14.
The highlight of this week’s economic calendar, the Bureau of Labor Statistics will release the Employment Situation Summary for August tomorrow at 8:30 am Eastern Standard Time.
At Thursday’s closing bell, the broad-based S&P 500 was up 0.8% to a new all-time closing high of 6,502.
The blue-chip Dow Jones Industrial Average had added 0.8% to 45,621, and the tech-heavy Nasdaq Composite was up 1.0% to 21,707.
Countdown to Jobs Friday
According to FactSet, the median estimate for August nonfarm payrolls is 80,000, up from 73,000 in July. As FactSet Senior Earnings Analyst John Butters observes, “If 80,000 is the actual increase in nonfarm payrolls, it will mark an increase relative to the previous month. However, it will also be below the trailing 12-month average of 128,000.”
The median estimate for the unemployment rate is 4.2%, in line with July but above the trailing 12-month average of 4.1%.
“Given the disorienting slowdown in employment growth,” writes Guy Berger, workforce economist in residence at Guild and a senior fellow at the Burning Glass Institute, “the most interesting signals in Friday’s jobs report will come from household survey ratios like the unemployment rate and prime-working-age employment-population ratio.”
Berger has a longer take on the employment situation: “I don’t know what August’s data will look like. Some folks I respect have a strong conviction that it’s the first step in another non-trivial run-up like the one we saw between January and July 2024 (or perhaps something bigger).”
The economist says that’s “well within the realm of possibility” but also “speculation about ‘data yet to come’ – not something that’s latent in ‘data we’ve seen so far’.”
An unemployment rate of 4.3% would tip Berger closer to the pessimist camp.
CRM stock gets creamed
Salesforce reported earnings of $2.91 per share (+13.7% year over year) on revenue of $10.24 billion (+9.8% YoY). Analysts forecast earnings per share of $2.78 on revenue of $10.14 billion.
Management said third-quarter EPS will be $1.60 to $1.62 on revenue of $10.24 billion to $10.29 billion. Analysts expected revenue guidance of $10.29 billion.
CRM stock closed down 4.8% Thursday, has shed 26.8% so far in 2025, and is among the worst-performing members of the S&P 500 this year.
FIG stock sinks on earnings miss
The cloud-based design software outfit reported earnings of $846,000, essentially $0.00 on a per-share basis, vs a forecast of 9 cents. Figma expects to report revenue growth of 33% for the third quarter and 37% for the full year.
Should you buy FIG stock? is perhaps an even more compelling question with post-IPO froth taken off the top of the share price.
Today in ‘up and to the right’
Ben Carlson, director of institutional asset management at Ritholtz Wealth Management, has a great timeline of recent history to share.
“In the past 30 years,” Carlson writes, “the following has occurred …” Beginning with the dot-com bubble of 1995 to 2000 and the aftermath of its burst from 2000 to 2002 and ending with Liberation Day, a lot has happened.
And, yet, “Despite all of this, the S&P 500 returned 10.4% per year.”
“All of this” includes terrorist attacks and President Donald Trump’s tariffs as well as the Great Financial Crisis and a global pandemic.
“This list could go on and on,” Carlson concludes. “There’s plenty of other stuff that happened that I missed.” It’s a great reminder that even if markets are spooked you don’t have to be.
