U.S. Stocks Close Friday in Red

(MENAFN) US stocks ended the day lower on Friday, driven by a weaker-than-expected jobs report that sparked fresh worries about the economy's momentum.

The Dow Jones Industrial Average dropped 220.43 points, or 0.48%, closing at 45,400.86. The S&P 500 fell 20.58 points, or 0.32%, to 6,481.5, while the Nasdaq Composite slipped 7.31 points, or 0.03%, to 21,700.39. Despite early gains, with all three major indexes reaching record intraday highs, the market reversed course as the session progressed.

Among the S&P 500 sectors, six out of 11 finished in the red, with energy and financials leading the declines at 2.06% and 1.84%, respectively. On the other hand, real estate and communication services saw gains, up 0.98% and 0.55%, respectively.

The U.S. Bureau of Labor Statistics revealed that only 22,000 jobs were added in August, far below the 75,000 expected by analysts surveyed by Dow Jones. The unemployment rate ticked up to 4.3%, in line with forecasts.

The disappointing employment data heightened speculation that the Federal Reserve might implement a quarter-point interest rate cut at its upcoming meeting later this month. Market participants are also pricing in the potential for a larger half-point reduction, according to the FedWatch tool. In the aftermath, U.S. President Donald Trump took to social media to again criticize Fed Chair Jerome Powell.

James Knightley, Chief International Economist at ING, noted that the weak labor market signals increased pressure on the Fed. "The U.S. economy is dominated by consumer spending (70 percent of GDP). The consumer is already anxious about tariffs hiking prices, leading to squeezed spending power ... We look for 25bp rate cuts in September, October and December with a further 50bp of cuts in early 2026," Knightley said.

On the corporate front, Broadcom saw a notable surge, rising 9.41% after the semiconductor giant posted stronger-than-expected earnings, driven by increased demand for its artificial intelligence products. The company also announced a significant new customer, widely reported to be OpenAI.

Tesla gained 3.64% following the announcement of a new compensation package for CEO Elon Musk, which includes ambitious performance targets that could result in total compensation of up to $1 trillion over the next decade. Other major tech stocks experienced mixed results. Nvidia and Microsoft each lost more than 2.5%, Amazon dropped 1.42%, and Apple finished slightly lower. However, Alphabet and Meta Platforms closed in the green.

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