U.S. equity benchmarks ended Friday mixed, with the S&P 500 and Dow Jones Industrial Average posting weekly gains while the Nasdaq Composite declined, as investors assessed labor market data and upcoming corporate earnings.
The S&P 500 fell 0.25% on Friday to close at 7,711.76, paring a weekly advance of 0.5%. The Dow Jones Industrial Average slipped 0.02% to 53,559.99, yet still recorded its first weekly gain in three weeks at 0.5%. The Nasdaq Composite dropped 0.52% to 26,402.42, pressured by declines in semiconductor shares including Nvidia and Intel, though it eked out a 0.9% weekly rise.
Fed funds futures indicated a 57.5% probability of a September rate hike, up from 35.4% the prior day, according to CME Group’s FedWatch tool. The shift followed remarks from Federal Reserve Chairman Kevin Warsh at the Jackson Hole symposium, where he noted that recent inflation readings, while improved, do not signal a material trend change.
Attention now turns to Thursday’s August jobs report, with economists polled by Reuters forecasting nonfarm payrolls to rise by 58,000, steadying the unemployment rate at 4.1%. The estimate follows a July decline of 23,000 jobs. Additional data on manufacturing and services activity will also be released.
The Institute for Supply Management’s prior report showed factory activity at its highest level in more than four years, underscoring uneven momentum across sectors.
Corporate earnings will further shape market direction, with notable reports from Broadcom on Wednesday, alongside Dell Technologies, Palo Alto Networks, HPE, Snowflake, and Lululemon. Technology heavyweights Nvidia and Intel remain focal points amid ongoing earnings season dynamics.
Analysts at Evercore ISI highlighted the strength of second-quarter earnings, noting 86% of companies beat expectations with a near-record 24% earnings-per-share surprise. Year-over-year EPS growth for the quarter is estimated at approximately 50%, while the U.S. 10-year Treasury yield hovers near 4.75%, a level often cited as a market sensitivity threshold.
JPMorgan strategists suggested that even a modest summer jobs miss could still leave policymakers with a constructive view of labor conditions, though a reading below 0.2% monthly growth may prompt a more cautious stance. Bank of America noted the S&P 500’s forward price-to-earnings ratio has compressed to 20 times from 22 times at the start of the year, with its long-term model projecting annualized losses of 3% over the next decade for the index, versus a 3% gain for the equal-weighted version.
