The main U.S. equity indexes, poised to open lower following a series of announcements from President Donald Trump about new tariffs, sank Friday after incoming data showed the labor market may not be as solid as Federal Reserve officials believe it is. And just like that, a September rate cut is back to being more probable than not.
Indeed, according to Friday's jobs report, nonfarm payroll employment "changed little in July and has shown little change since April" following "larger than normal" revisions to estimates for May and June.
And how to invest for a rate cut in the fall might be the most fascinating question in financial markets right now.
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The Bureau of Labor Statistics said the U.S. economy added 73,000 jobs last month, well below a FactSet-compiled median estimate of 115,000. May's total was revised from 144,000 to 19,000, June's from 147,000 to 14,000.
"With these revisions," the BLS notes, "employment in May and June combined is 258,000 lower than previously reported." And that's going to leave a mark.
"What had looked like a Teflon labor market showed some scratches this morning," writes Morgan Stanley Wealth Management Chief Economic Strategist Ellen Zentner, noting that "tariffs continue to work their way through the economy."
"A Fed that still appeared hesitant to lower rates may see a clearer path to a September cut," the economist concludes, "especially if data over the next month confirms the trend."
The softer-than-expected July jobs report, including an uptick in the unemployment rate from 4.1% to 4.2%, boosted the odds of a 25-basis-point move after the next Fed meeting from 37.7% Thursday to 80.8% Friday.
All the big names are here
Amazon.com (AMZN, -8.3%) was the worst of the 30 Dow Jones stocks Friday after beating bottom-line expectations but missing on revenue growth estimates for Amazon Web Services and underwhelming with guidance.
UnitedHealth Group (UNH, -4.8%) was the second-worst Dow stock, hitting a new 52-week low, though health care stocks were the best among just three of the 11 official GICS sectors in the green for the day.
Energy was among the three worst sectors, with oil stocks Chevron (CVX, -0.2%) and Exxon Mobil (XOM, -1.8%) retreating after both companies reported earnings before Friday's opening bell.
Consumer discretionary stocks, anchored by AMZN, sank the most among the sectors Friday. AMZN was also the worst of the Magnificent 7, with the Roundhill Magnificent Seven ETF (MAGS, -3.0%) showing the effects of its concentration.
Alphabet (GOOGL, -1.4%), Apple (AAPL, -2.5%), Meta Platforms (META, -3.0%), Microsoft (MSFT, -1.8%), Nvidia (NVDA, -2.3%) and Tesla (TSLA, -1.8%) all posted red numbers.
By the closing bell at the end of one of the busiest weeks in recent market history, the tech-heavy Nasdaq Composite was down 2.2% to 20,650 and is now 3.9% below its all-time closing high.
The broad-based S&P 500 Index lost 1.6% to 6,238, ending Friday 3.0% from its all-time closing high.
And the Dow Jones Industrial Average was down 1.2% to 43,588 and will begin the new week 3.4% from a fresh peak.
Big moves for new tech, too
Coinbase (COIN, -16.7%) beat on earnings but missed on revenue and gave back all it gained earlier this week when it announced a partnership with JPMorgan Chase (JPM, -2.4%) to enable cryptocurrency purchases with credit cards.
Reddit (RDDT, +17.3%) posted double-digit beats on earnings and revenue and boosted guidance on its way to a double-digit gain Friday.
And not only is Figma (FIG, +5.4%) holding its immediate post-IPO gains, it's extending them.
Whether you should buy FIG stock still comes down to your risk tolerance, time horizon and portfolio objectives.
Buffett's Berkshire announces its earnings date
The press release announcing the date Berkshire Hathaway (BRK.B, +0.2%) will post its second-quarter earnings "on the internet" is a work of art, a modern miracle of brevity and wit.
For the record, Warren Buffett and Berkshire Hathaway will show us their work for the three months ending June 30 at 8 a.m. ET Saturday.
Two analysts cover BRK.B, and both rate it a Buy. One says earnings will be $5.01 per share, the other $5.06. The single revenue estimate is $82.22 billion. A year ago, Berkshire reported EPS of $5.38 on revenue of $93.65 billion.
Top to bottom, including full company name and complete contact information, the press release is 154 words. And it offers this "cautionary statement," well worth quoting in full:
"Certain statements contained in this press release are 'forward looking' statements within the meaning of the Private Securities Litigation Reform Act of 1995. Berkshire assumes no obligation and does not intend to update these forward-looking statements."
OK, here's a fun activity for a Friday evening, maybe Saturday morning (in addition to reading Berkshire's earnings report): Take a look at the press release and count the number of "forward-looking statements"...
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