Markets Stride Higher on Rate Cut Expectations

Thursday, September 4, 2025Market indexes caught their stride today, shrugging off another weak jobs report from ADP (ADP) this morning, which was offset somewhat by a strong Q2 Productivity report and lower Unit Labor Costs. Market participants also anticipate more softness in Friday morning’s jobs report from the U.S. Bureau of Labor Statistics (BLS).The Dow cruised ahead by +350 points today, +0.77%, and it was the laggard among major indexes. The S&P 500 grew by +0.83% and the Nasdaq gained +209 points, +0.97%. The small-cap Russell 2000 won the day, up +25 points or +1.09% for the session. Bond yields crept back to +4.17% on the 10-year and +3.59% on the 2-year.Q2 Earnings After the Bell: AVGO, LULUOne of the best AI chip plays not named NVIDIA is Broadcom AVGO, which reported better-than-expected results on both top and bottom lines after today’s close. Earnings of $1.69 per share outpaced expectations by 3 cents, while revenues of $15.95 billion bettered the $15.83 billion analysts were expecting. Shares are flat on the news.Adjusted EBITDA and AI sales in the quarter were both better than estimated: $10.7 billion and $6.2 billion, respectively. The company’s recently acquired VMWare continues to impress in terms of growth. Broadcom also posted record high free cash flow. Shares are up +200% over the past two years and +32% year to date, so consider this selling some mere profit-taking.lululemon LULU shares outperformed on the bottom line in its Q2 this afternoon, with earnings of $3.10 per share surpassing the $2.84 in the Zacks consensus. Revenues came in-line with estimates at $2.53 billion, but guidance for the ongoing quarter and full fiscal year was downgraded based on tariff headwind concerns. Shares have sunk -12% thus far in late trading.What to Expect from the Stock Market TomorrowThe all-important Employment Situation report hits the tape Friday morning, an hour ahead of the opening bell. Expectations are for a similarly paltry 75K new jobs filled for August, only slightly ahead of the 73K reported for July, which was a major disappointment when it reported a month ago. The Unemployment Rate is expected to tick up to +4.3%, which would be the highest since October 2021.This is not the only labor market metric that has displayed a slowdown in employment. In these BLS numbers over the trailing four months, we’re averaging only +61K per month. Contrast that with the previous four-month average of +192K — it’s more than triple. Then again, lower jobs numbers are what will guarantee at least one Fed rate cut before the end of 2025.Questions or comments about this article and/or author? Click here>>Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report lululemon athletica inc. (LULU): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks