Stock Market Today: Stocks Lose Steam Ahead of Labor Day
The latest jobs report, which showed a slowing but still firm labor market, did little to move stocks ahead of the long holiday weekend.
Stocks opened higher Friday as investors cheered the August jobs report. The initial burst of buying power quickly faded, however, with many market participants likely checking out early ahead of the long holiday weekend.
As a reminder, both the stock and bond markets are closed this Monday for the Labor Day holiday.
Taking a closer look at this morning's nonfarm payrolls data shows the U.S. added 187,000 new jobs in August. While this figure came in above economists' estimates, it was below the downwardly revised June and July payroll increases. Average hourly earnings – a measure of inflation that's tracked by the Federal Reserve – also rose at a slower pace than the prior two months, while the unemployment rate rose to 3.8% from 3.5% in July.
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"Overall, this report tells you that the economy is growing and normalizing," says Sonu Varghese, global macro strategist at Carson Group, an advisory firm with over $21 billion in assets under management. "Employment growth is more than enough to keep up with population growth, worker hours are rising and wage growth is easing. And the big picture is that there's no recession right, nor are we close to one right now barring unforeseen shocks."
As for the impact today's jobs report had on rate-hike expectations, futures traders are now pricing in a 93% probability the Fed will keep interest rates unchanged at its September meeting, up from yesterday's 88%, according to CME Group. Chances for a November rate hike ticked slightly higher, to 38.3% from 37.1%.
Walgreens sinks as CEO splits
While today's attention was squarely focused on the August jobs report and what it could mean for the Fed moving forward, there were some noteworthy single-stock headlines that hit the newswires.
Among them were reports that Rosalind Brewer will be stepping down as CEO of Walgreens Boots Alliance (WBA) after nearly three years on the job. While the news was unexpected, the decision was "mutually agreed" upon by both Brewer and the retail pharmacy chain's board of directors, according to a press release. Ginger Graham, current lead independent director at Walgreens, will serve as interim CEO until a permanent replacement is found.
This is just the latest C-suite shakeup for Walgreens, which in July announced the departure of its chief financial officer. Notably, the move comes alongside the company's warning that adjusted earnings for the fiscal year ended August 31 will likely arrive at the low end of guidance. The blue chip stock slumped 7.4% today in reaction, bringing its year-to-date decline to more than 37%. WBA is the worst-performing Dow Jones stock so far in 2023.
Elsewhere, Broadcom (AVGO) reported fiscal third-quarter earnings of $10.54 per share on revenue of $8.88 billion – both of which beat analysts' forecasts. However, the semiconductor stock fell 5.5% with Wells Fargo analyst Aaron Rakers saying investors were expecting stronger guidance around the company's artificial intelligence (AI) initiatives.
As for the major market indexes, the Nasdaq Composite ended marginally lower at 14,031.81, while the S&P 500 (+0.2% at 4,515) and the Dow Jones Industrial Average (+0.3% at 34,837) closed modestly higher.
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