US stocks ended a shortened week mixed, with the Nasdaq up 1.14% on strength in Apple and Alphabet, the S&P 500 up 0.33%, and the Dow down 0.32%. Weaker-than-expected labor market data initially boosted hopes for Fed rate cuts but later raised concerns about economic growth. Nonfarm payrolls showed just 22,000 jobs added in August, well below forecasts, while unemployment rose to 4.3%. ADP also reported slowing private hiring, and job openings hit the lowest since 2024. Futures priced in an almost 100% chance of a September rate cut. Treasury yields fell, with the 10-year hitting its lowest since April. ISM data showed manufacturing contracting for a sixth month, though at a slower pace, while services expanded modestly.
European stocks were mixed, with the STOXX Europe 600 down 0.17% amid growth concerns and a stronger euro. Italy’s FTSE MIB (-1.39%), Germany’s DAX (-1.28%), and France’s CAC 40 (-0.38%) fell, while the UK’s FTSE 100 rose 0.23%. Eurozone inflation stayed near target at 2.1% headline and 2.3% core, easing services inflation to 3.1%. Policymakers signaled rates would likely remain steady, with most economists saying the ECB has ended easing. The labor market held firm as unemployment dipped to 6.2%, though retail sales slipped 0.5% in July. In the UK, mortgage approvals beat forecasts but house prices were mixed. BoE Governor Bailey cautioned against assuming further rate cuts, citing inflation risks and labor market weakness.
