Fed Rate Cut Odds Surge After Weak August Jobs Report

U.S. stocks experienced initial gains but ultimately closed lower following a weak August jobs report that added just 22,000 positions versus the expected 75,000, and an unemployment rate rising to 4.3%. This disappointing labor data intensified expectations for the Federal Reserve to implement interest rate cuts, with a 100% probability of a 25 basis point cut at the September meeting and a notable chance of a 50 basis point reduction. The S&P 500 and other major indexes reached record intraday highs before retreating, with sectors like energy and financials leading losses while real estate and communication services gained. President Donald Trump criticized Fed Chair Jerome Powell amid these developments. Broadcom shares surged over 9% following strong quarterly earnings driven by AI product demand, partially offsetting market declines. Treasury yields fell sharply, mortgage rates dropped significantly, and analysts forecast multiple rate cuts through the end of 2025 and into early 2026 to support economic growth amid ongoing concerns about the labor market and inflation.