Wall Street started firm but faded through the session after payroll growth cooled and unemployment rose to 4.3 percent, the highest in almost four years. The S&P 500 slipped, the Dow lagged, and the Nasdaq held near flat as Treasury yields sank to five-month lows and traders leaned harder into a September policy pivot.
Earnings and single-stock moves cut both ways. Broadcom ripped to record territory after another AI-heavy quarter and confident guidance, reinforcing the market’s preference for infrastructure names tied to the build-out. On the consumer side, Lululemon cratered after trimming its full-year outlook again, citing slower U.S. demand and tariff pressure, an uncomfortable tell for discretionary spending just as macro signals cool.
Tesla added support on the margins as its board floated a sprawling, performance-based compensation plan for Elon Musk, tying long-dated share grants to towering production, autonomy, and market-cap milestones. Debate over governance aside, the headline nudged sentiment around megacap durability at a moment when investors are seeking growth stories that can run through a softer tape.
Under the surface, leadership stayed narrow. AI and software outperformed while more cyclical pockets lagged with the drop in yields. The bar for guidance remains high: investors are rewarding operational clarity and visibility into 2026 demand, and punishing anything that hints at inventory or pricing risk.
What Comes Next?
The path into the September 17 Fed decision now runs through next week’s inflation print and a blitz of corporate updates. A cooler CPI would cement market-implied odds of a cut and keep duration bid, while any upside surprise could complicate the soft-landing narrative that’s carried tech all summer. For equities, the question is simple: can AI-exposed leaders keep doing the heavy lifting if consumer and cyclical trends continue to soften, or does breadth finally have to show up?
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