[BRIEFING.COM] The S&P 500 (-0.44%) is in second place on Friday afternoon, down about 34 points.

Briefly, S&P 500 constituents Autodesk (ADSK 218.00, -19.52, -8.32%), PTC (PTC 141.93, -8.15, -5.43%), and Netflix (NFLX79.14, -3.52, -4.26%) pepper the bottom of the standings despite a dearth of corporate news.

Meanwhile, Sandisk (SNDK 1719.21, +164.22, +10.56%) is today's top gain getter as stronger DRAM and NAND pricing, robust server demand, a broader rotation into semiconductors, and a technical bounce from key moving averages boost investor sentiment toward memory stocks.

[BRIEFING.COM] With about two hours to go on Friday afternoon the tech-heavy Nasdaq Composite (-0.49%) is the "best" performing major average, down about 131 points.

Gold futures settled $63.30 higher (-1.4%) at $4,476.60/oz, down then about -1.2% on the week, following a stronger-than-expected August jobs report, which boosted Treasury yields and the U.S. dollar while raising expectations for a potentially more hawkish Federal Reserve.

Meanwhile, the U.S. Dollar Index is up about +0.2% to $99.16.

[BRIEFING.COM] The Dow Jones Industrial Average (-0.51%) is in last place on Friday afternoon, down about 272 points.

A look inside the DJIA shows that Apple (AAPL 321.82, -6.39, -1.95%), Microsoft (MSFT 500.67, -9.45, -1.85%), and Amgen (AMGN 436.83, -7.29, -1.64%) are notably lower.

Meanwhile, Caterpillar (CAT 810.59, +10.45, +1.31%) is currently atop the standings.

The DJIA is poised to end the week -0.27% lower.

Also, at the top of the hour, Baker Hughes (BKR 62.96, -0.68, -1.07%) announced a weekly U.S. rotary rig count of 588, flat w/w and +51 yr/yr.

[BRIEFING.COM] The major averages are modestly lower at midday after a stronger-than-expected August Employment Report increased expectations for a September rate hike and took some momentum out of yesterday's broad advance. The S&P 500 (-0.3%), Nasdaq Composite (-0.2%), and DJIA (-0.5%) have recovered somewhat from their session lows, while the Russell 2000 (+0.2%) and S&P Mid Cap 400 (+0.3%) trade modestly higher.

The employment report showed stronger-than-expected payroll growth and a lower-than-expected unemployment rate, prompting the market to increase its expectations for another rate hike at the September FOMC meeting. The CME FedWatch Tool now assigns roughly a 60% probability to a rate hike, up from about 50% yesterday. Adding to the more hawkish policy backdrop, Cleveland Fed President Beth Hammack (voting FOMC member) said inflation remains too high, the labor market is stable, and current policy is not restrictive, concluding that "it's time to act."

The consumer discretionary sector (-1.5%) sits at the bottom of the sector standings, with weakness in several of its largest components contributing to the decline. Tesla (TSLA 352.50, -23.86, -6.34%) has given back the entirety of yesterday's rally, while lululemon athletica (LULU 100.50, -21.27, -17.47%) is one of the weakest S&P 500 components following its earnings report.

The communication services sector (-0.9%) is another notable laggard amid broader weakness across mega-cap stocks.

The information technology sector (+0.4%), meanwhile, is outperforming thanks to considerable strength across semiconductor stocks. The PHLX Semiconductor Index is up 3.3%, led by memory and semiconductor component names, helping offset pronounced weakness in software stocks. The iShares GS Software ETF is down 1.9%, with Adobe (ADBE 268.37, -17.38, -6.08%) falling sharply after naming a new CEO.

The industrials (+0.4%) and utilities (+0.2%) sectors are also trading higher.

Credit bureau and credit-scoring stocks are another point of particular weakness following comments from FHFA Director Bill Pulte regarding potential changes to the mortgage credit-scoring market. Fair Isaac (FICO 938.22, -180.71, -16.15%) is down sharply after Mr. Pulte said Fannie Mae and Freddie Mac will allow all lenders to use VantageScore, increasing competition for FICO's mortgage-scoring business. Equifax (EFX 176.95, -12.14, -6.42%) and TransUnion (TRU 78.94, -5.98, -7.05%) are also sharply lower after Mr. Pulte criticized credit reporting agencies over pricing and said he is considering a "bi-merge" system that would require mortgage lenders to pull two credit reports instead of three.

Overall, the stronger employment data and accompanying increase in rate hike expectations have interrupted some of Thursday's positive momentum, while weakness across mega-cap stocks has kept the major averages in negative territory. Still, strong semiconductor gains and pockets of strength outside the largest stocks have limited the broader decline, leaving the major averages on track for a mixed week-to-date finish.

Reviewing today's data:

• August Nonfarm Payrolls 162K (Briefing.com consensus 45K); Prior was revised to 21K from -23K, August Nonfarm Private Payrolls 127K (Briefing.com consensus 45K); Prior was revised to 71K from 30K, August Unemployment Rate 4.1% (Briefing.com consensus 4.2%); Prior 4.1%, August Average Hourly Earnings 0.3% (Briefing.com consensus 0.2%); Prior was revised to 0.2% from 0.1%, August Average Workweek 34.4 (Briefing.com consensus 34.3); Prior 34.3
  
  • The quick takeaway by the market is that this report just might persuade the Fed to raise rates at its September FOMC meeting. The key takeaway, though, is that a rate hike in September is not assured by this August data. To that end, the 3-month average for total nonfarm payrolls was still just a modest 71,000, there was a moderation in average hourly earnings growth to 3.1% from 3.2% on a year-over-year basis, and persons unemployed for 27 weeks or more accounted for 27.0% of the unemployed versus 25.5% in July.

[BRIEFING.COM] The S&P 500 (-0.3%), Nasdaq Composite (-0.3%), and DJIA (-0.5%) are off their worst levels of the session, modestly lower just after midday.

Electrical utility names such as NRG Energy (NRG 117.00, +5.16, +4.61%) are moving higher today, keeping the utilities sector (+0.2%) in positive territory alongside the industrials (+0.4%) and information technology (+0.2%) sectors.

[BRIEFING.COM] The major averages continue to trade in a steady range near session lows at midday. 

Adobe (ADBE 268.26, -17.50, -6.12%) is sharply lower today after naming its new CEO. Anil Chakravarthy will take the helm on December 1, replacing long-time CEO Shantanu Narayen, who will transition to executive chair to help ensure a smooth transition and support Adobe's ongoing transformation.

The software group is weaker today, with the iShares GS Software (IGV 104.68, -2.27, -2.12%) down 2.1%. Autodesk (ADSK 217.80, -19.72, -8.30%) and Synopsys (SNPS 391.87, -24.44, -5.87%) are among the other notable laggards

[BRIEFING.COM] The S&P 500 (-0.5%), Nasdaq Composite (-0.4%), and DJIA (-0.7%) are charting session lows just before midday as stocks move broadly lower today.

A stronger-than-expected August employment report proved to be a catalyst for selling at th open as the market's implied odds of a rate hike at the September FOMC meeting increased in the wake of the report. The CME Fed Watch tool now shows a 60% probability of a rate hike, up from 50% yesterday.

Eight S&P 500 sectors trade lower, with particular weakness across many of the market's mega-cap components pushing the consumer discretionary (-1.8%) and communication services (-1.1%) sectors to the bottom of the leaderboard. The Vanguard Mega Cap Growth ETF is down 0.6%.

However, the PHLX Semiconductor Index is up 2.8%, which keeps the information technology sector on its flatline despite sharp losses across software names.

Elsewhere, lululemon athletica (LULU 100.50, -21.27, -17.47%) retreats after earnings, while credit-scoring names such as Fair Isaac (FICO 920.50, -198.43, -17.73%) also move sharply lower following comments from FHFA Director Bill Pulte regarding potential changes to the mortgage credit-scoring market.

The major averages are now on track for a mixed week-to-date finish.

[BRIEFING.COM] The major averages continue to chart session lows.

Credit bureau and credit-scoring stocks are facing steep losses following comments from FHFA Director Bill Pulte regarding potential changes to the mortgage credit-scoring market. Fair Isaac (FICO 922.61, -196.32, -17.55%) is down sharply after Mr. Pulte said Fannie Mae and Freddie Mac will immediately allow all lenders to use VantageScore following what he described as a successful initial rollout, increasing competition for FICO's mortgage-scoring business. Equifax (EFX 173.45, -15.64, -8.27%) and TransUnion (TRU 77.66, -7.26, -8.56%) are also sharply lower despite jointly owning VantageScore, as Mr. Pulte criticized credit reporting agencies over pricing and said he is considering a "bi-merge" system that would require mortgage lenders to pull two credit reports instead of three. Such a change could reduce mortgage credit-report volumes for the major bureaus.

[BRIEFING.COM] The S&P 500 (-0.3%), Nasdaq Composite (-0.2%), and DJIA (-0.5%) now trade lower across the board as broad weakness begins to outweigh gains in technology stocks.

LULU is the worst-performing S&P 500 component after disappointing with its Q2 (Jul) results last night, with shares falling below $100 for the first time in several years. Guidance is the main source of pressure, with Q3 EPS and revenue guidance well below expectations and lululemon athletica (LULU 100.65, -21.12, -17.34%) cutting its FY27 guidance significantly for a second consecutive quarter, adding to concerns ahead of its CEO transition.

The consumer discretionary sector (-1.4%) is also the worst-performing S&P 500 sector, though that is more due Tesla (TSLA 352.85, -23.52, -6.25%) giving back the entirety of yesterday's rally.

[BRIEFING.COM] The S&P 500 (-0.1%), Nasdaq Composite (+0.1%), and DJIA (-0.3%) are mixed shortly after the open as increased odds for a September rate hike weigh against lingering strength in semiconductor stocks.

The August Employment Report released this morning was stronger than expected, decreasing the odds that the Fed will keep rates on hold and taking some of yesterday's momentum out of equities. The CME Fed Watch tool now assigns a 60.4% probability to a rate hike at the September 16 FOMC meeting, up from 49.4% yesterday.

Weakness is broad, with nine S&P 500 sectors trading lower. However, the top-weighted information technology sector (+0.9%) is firmly higher due to a 3.5% surge in the PHLX Semiconductor Index, limiting losses for the S&P 500 and keeping the Nasdaq Composite in positive territory.

Memory names and semiconductor component stocks are the early outperformers, while lululemon athletica (LULU 100.24, -21.53, -17.68%) is the weakest S&P 500 component after earnings, and a host of financial publishing stocks also face steep losses.

Equity futures now point to a mostly lower open after a stronger-than-expected August employment report. 

Nonfarm payrolls increased by 162,000 in August, much better than expected; the unemployment rate of 4.1% was lower than expected; the average workweek at 34.4 hours was higher than expected; and the 0.3% increase in average hourly earnings was as expected.

The quick takeaway by the market is that this report just might persuade the Fed to raise rates at its September FOMC meeting. The key takeaway, though, is that a rate hike in September is not assured by this August data. To that end, the 3-month average for total nonfarm payrolls was still just a modest 71,000, there was a moderation in average hourly earnings growth to 3.1% from 3.2% on a year-over-year basis, and persons unemployed for 27 weeks or more accounted for 27.0% of the unemployed versus 25.5% in July.

Equity futures now have a slightly negative tilt after the August employment report came in stronger than expected.

Equity indices in the Asia-Pacific region had a mostly higher finish to the week. JGBs of all tenors climbed overnight, extending their bounce off this year's lows. Softbank priced a JPY1 trillion 7-yr note offering at the higher end of the indicated yield range. Japan's Finance Minister Katayama confirmed that the budget for fiscal 27/28 will reach a new record of JPY143 trillion. Today's small data slate included Japan's largest decline in household spending in more than two years as consumers reduced spending on food and transportation.

• In economic data:
  • Japan's July household spending increased 0.5% month-over-month (expected 2.6%; last -6.4%) and decreased 3.6% year-over-year (expected -1.6%; last -3.3%), marking the largest annual decline in more than two years as consumers reduced spending on food and transportation.
  • South Korea's July current account surplus narrowed to $42.08 billion from $49.73 billion.

---Equity Markets---

• Japan's Nikkei: +1.3%
• Hong Kong's Hang Seng: +1.7%
• China's Shanghai Composite: -0.3%
• India's Sensex: +0.5%
• South Korea's Kospi: +1.6%
• Australia's ASX All Ordinaries: UNCH

Major European indices trade near their flat lines with Germany's DAX (+0.3%) showing some relative strength. Norway's sovereign wealth fund is looking to reduce its holdings of U.S. Treasuries from 70% to 50%, according to FT . Volkswagen outperforms after its supervisory board approved a plan that calls for up to 50,000 job cuts. The U.K. is looking to approve new oil drilling efforts in the North Sea.

• In economic data:
  • Eurozone July retail sales decreased 0.6% month-over-month (expected 0.3%; last 0.2%) and increased 0.6% year-over-year (expected 1.1%; last 1.4%).
  • Germany's July factory orders increased 2.5% month-over-month (expected 0.3%; last 3.7%).
  • Italy's July retail sales decreased 0.4% month-over-month (expected 0.2%; last -0.2%) and increased 0.8% year-over-year (last 3.1%).

---Equity Markets---

• STOXX Europe 600: -0.1%
• Germany's DAX: +0.5%
• U.K.'s FTSE 100: -0.2%
• France's CAC 40: -0.2%
• Italy's FTSE MIB: -0.3%
• Spain's IBEX 35: -0.1%

The S&P 500 futures currently trade 21 points below fair value.

Nonfarm payrolls increased by 162,000 (Briefing.com consensus 45,000) in August, while the July reading was revised to 21,000 from -23,000.

Private payrolls increased by 127,000 (Briefing.com consensus 45,000), with the prior reading revised to 71,000 from 30,000.

The unemployment rate held at 4.1% (Briefing.com consensus 4.2%).

Average hourly earnings increased 0.3% (Briefing.com consensus 0.2%), while the prior reading was revised to 0.2% from 0.1%.

The average workweek increased to 34.4 hours (Briefing.com consensus 34.3) from 34.3 in July.

Equity futures point to a mostly flat opening as the market awaits the August Employment Report at 8:30 a.m. ET, though some early momentum across semiconductor names has the Nasdaq Composite on track for a firmly higher open.

Investors will be particularly attuned to the report as it has the potential to move the market's implied odds of the FOMC's next move. The odds that the Fed keeps rates on hold at the next meeting returned to near coin-flip chances yesterday (after previously moving lower) following what the market deemed dovish commentary from Fed Governor Christopher Waller (a voting FOMC member).

Combined with an easing in Treasury yields, stocks posted broad gains yesterday and enjoyed exceptional leadership from mega-cap stocks, leaving the major averages with modest week-to-date gains entering today's session.

Today's remaining economic calendar:

• 8:30 AM ET: August Nonfarm Payrolls; Briefing.com consensus 45K; prior -23K
• 8:30 AM ET: August Nonfarm Private Payrolls; Briefing.com consensus 45K; prior 30K
• 8:30 AM ET: August Unemployment Rate; Briefing.com consensus 4.2%; prior 4.1%
• 8:30 AM ET: August Average Hourly Earnings; Briefing.com consensus 0.2%; prior 0.1%
• 8:30 AM ET: August Average Workweek; Briefing.com consensus 34.3; prior 34.3

In corporate news:

• Samsara (IOT 44.20, +5.45, +14.06%) is a notable premarket gainer after beating second-quarter earnings and revenue estimates, with revenue increasing 29.9% year-over-year.
• DocuSign (DOCU 67.00, +1.03, +1.56%) is higher after reporting better-than-expected second-quarter earnings and revenue and issuing in-line third-quarter and fiscal-year revenue guidance.
• Lululemon athletica (LULU 86.74, -25.03, -20.6%) beat EPS estimates by $1.13 but missed on revenue, guided Q3 EPS and revenue below consensus, and lowered its FY27 EPS and revenue outlook below consensus.
• United Microelectronics (UMC 20.57, +0.71, +3.58%) is higher after reporting that August sales increased 30.7% year-over-year, lifting sales through the first eight months of the year by 14.7%.

Reviewing overnight developments:

JGBs across the curve extended their bounce from this year's lows during the regional session. Japan's Nikkei: +1.3%, Hong Kong's Hang Seng: +1.7%, China's Shanghai Composite: -0.3%, India's Sensex: +0.5%, South Korea's Kospi: +1.6%, Australia's ASX All Ordinaries: UNCH.

In news:

• Japan's Finance Minister Katayama confirmed that the fiscal 2027-28 budget will reach a record JPY143 trillion.

In economic data:

• Japan's July Household Spending 0.5% m/m (expected 2.6%; last -6.4%); -3.6% yr/yr (expected -1.6%; last -3.3%)
• South Korea's July Current Account $42.08 bln (last surplus of $49.73 bln)

The regional session featured attention on sovereign-asset allocation and energy policy, while economic data were mixed. STOXX Europe 600: +0.1%, Germany's DAX: +0.3%, U.K.'s FTSE 100: -0.1%, France's CAC 40: -0.1%, Italy's FTSE MIB: -0.3%, Spain's IBEX 35: UNCH.

In news:

• Norway's sovereign wealth fund is reportedly considering reducing the Treasury share of its U.S. holdings to 50% from 70%.
• The U.K. is looking to approve new oil-drilling efforts in the North Sea.

In economic data:

• Eurozone's July Retail Sales -0.6% m/m (expected 0.3%; last 0.2%); 0.6% yr/yr (expected 1.1%; last 1.4%)
• Germany's July Factory Orders 2.5% m/m (expected 0.3%; last 3.7%)
• Italy's July Retail Sales -0.4% m/m (expected 0.2%; last -0.2%); 0.8% yr/yr (last 3.1%)

[BRIEFING.COM] The major averages extended their rebound on Thursday, with easing Treasury yields providing a more favorable backdrop for equities after their sharp rise contributed to the market's early-week weakness. The S&P 500 (+1.1%), Nasdaq Composite (+1.4%), and DJIA (+1.2%) all finished with sizable gains, while the Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.9%) also advanced.

The 10-year note yield fell three basis points to 4.76%, continuing its retreat from the elevated levels reached earlier in the week. The move followed comments from Fed Governor Christopher Waller (voting FOMC member) that reduced some concern surrounding the possibility of another rate hike at the September FOMC meeting. While Mr. Waller acknowledged that inflation remains meaningfully above the Fed's 2.00% target and left open the possibility of another increase if progress stalls, investors focused more heavily on his observation that recent data have shown encouraging signs of disinflation. The CME FedWatch Tool assigned a 49.6% probability to the Fed leaving rates unchanged in September, up from 36.8% yesterday.

Thursday's advance featured particularly strong participation from large-cap growth stocks, with the Vanguard Mega Cap Growth ETF rising 1.6%. That strength helped propel the consumer discretionary (+1.6%) and communication services (+1.5%) sectors toward the top of the standings, with Tesla (TSLA 376.36, +19.36, +5.42%) and Meta Platforms (META 610.68, +17.83, +3.01%) among the more notable contributors.

The financials sector (+1.6%) was another source of leadership. Major banking names participated in the advance, while Robinhood Markets (HOOD 124.72, +17.73, +16.57%) and Coinbase Global (COIN 192.70, +17.74, +10.14%) posted especially large gains alongside a sharp increase in Bitcoin that carried the cryptocurrency above $80,000.

Technology stocks also played a significant role in the broader advance, although performance beneath the surface remained uneven. The information technology sector (+1.3%) overcame early semiconductor weakness as software stocks staged a pronounced rebound from Wednesday's selloff. The iShares GS Software ETF advanced 3.4%, with Snowflake (SNOW 356.24, +50.40, +16.48%) surging following an impressive earnings beat and Microsoft (MSFT 510.12, +13.30, +2.68%) gaining after announcing a significant overhaul of its reporting structure.

Semiconductor stocks were a relative laggard for much of the session after the PHLX Semiconductor Index (+0.1%) fell more than 2% shortly after the open, largely due to Broadcom's (AVGO 357.16, -10.08, -2.74%) post-earnings decline. The group recovered considerably as the session progressed, however. Broadcom's weakness came despite better-than-expected Q3 earnings and revenue, as elevated expectations surrounding its AI business and Q4 outlook appeared to outweigh another solid report.

Elsewhere in the technology space, Dell (DELL 515.94, +23.74, +4.82%) extended its post-earnings momentum and reached a new all-time high, while Hewlett Packard Enterprise (HPE 54.44, +2.61, +5.03%) moved lower despite reporting a broad earnings beat and above-consensus Q4 guidance. Some consumer-related names were notable exceptions to the otherwise constructive action. Tyson Foods (TSN 51.77, -4.04, -7.24%) remained under pressure after lowering its FY26 revenue guidance, while The Campbell's Company (CPB 22.12, -1.66, -6.96%) fell following its earnings report and disappointing FY27 outlook.

Meanwhile, geopolitical developments remained relatively quiet compared with earlier in the week. WTI crude settled $0.39 higher (+0.4%) at $91.35 per barrel, with the modest increase doing little to disrupt the equity rally. The energy sector (-0.7%) finished with the widest loss, while the materials sector (-0.5%) also retreated.

Ultimately, Thursday's advance built meaningfully on Wednesday's rebound as easing Treasury yields removed some of the pressure that weighed on stocks earlier in the week. Strength across mega-cap stocks, software, financials, and most other areas of the market more than offset lingering weakness in select semiconductor and consumer names, leaving the major averages with modest week-to-date gains heading into Friday's session.

U.S. Treasuries climbed on Thursday, though they made little intraday progress, finishing near their starting levels. The 2-year note yield settled down six basis points to 4.33%, and the 10-year note yield settled three basis points to 4.76%. 

• Russell 2000: +19.6% YTD
• Nasdaq Composite: +14.4% YTD
• S&P Mid Cap 400: +14.4% YTD
• S&P 500: +13.2% YTD
• DJIA: +11.7% YTD

Reviewing today's data: 

• July Trade Balance -$88.6 bln (Briefing.com consensus -$89.6 bln); Prior was revised to -$71.2 bln from -$73.3 bln
  • The key takeaway from the report is that the widening deficit will be a drag on Q3 GDP growth estimates.
• Q2 Productivity -Rev. 1.4% (Briefing.com consensus 1.4%); Prior 1.4%, Q2 Unit Labor Costs-Rev. 1.2% (Briefing.com consensus 1.3%); Prior 1.3%
  • The key takeaway from the report is that the downtick in unit labor costs from the advance estimate helped keep inflation concerns in check.
• Weekly Initial Claims 206K (Briefing.com consensus 205K); Prior was revised to 204K from 203K, Weekly Continuing Claims 1.779 mln; Prior was revised to 1.771 mln from 1.778 mln
  • The key takeaway from the report is that the low level of initial jobless claims continues to connote a low-firing environment.
• August S&P Global U.S. Services PMI - Final 56.5; Prior 56.8
• August ISM Non-Manufacturing Index 55.4% (Briefing.com consensus 54.1%); Prior 54.1%
  • The key takeaway from the report is that it shows services organizations haven't seen any relief in the prices they are paying for materials and services. That invites the risk of pass-through to customers and sustained inflation issues.