Market Retreats After Brief Record Run

The stock market opened strong, with an early rally propelling the S&P 500 (-0.3%) and Nasdaq Composite (flat) to fresh record intraday highs — 6,532.65 and 21,878.81, respectively — but the momentum didn’t hold. A softer-than-expected August jobs report reinforced expectations for rate cuts, yet also deepened concerns about slowing economic growth, prompting investors to take profits and send the major averages back into negative territory by the close. The DJIA (-0.5%) lagged throughout the session, while small- and mid-cap indices bucked the trend, with the Russell 2000 and S&P Mid Cap 400 each adding 0.5% on the day.

The employment data was the focal point: nonfarm payrolls grew by just 22,000 versus expectations for 78,000, private payrolls came in similarly soft at 38,000, and the unemployment rate ticked slightly higher to 4.3%. Average hourly earnings rose 0.3%, suggesting wage growth remains steady even as hiring slows. The figures solidified expectations for a September rate cut, with Fed funds futures now fully pricing in a 25-basis-point move and assigning a 10% chance of a half-point cut. Probabilities for additional cuts in October (≈80%) and December (≈70%) remain high, though hawkish commentary from Chicago Fed President Austan Goolsbee reminded markets that the Fed’s inflation fight is far from over.

Selling pressure was broad but not panicked, with six S&P 500 sectors ending in the red. Financials (-1.8%) underperformed on worries about loan demand and margin compression in a slower economy. Energy (-2.1%) was the weakest sector as crude oil slid 2.5% to $61.87 per barrel. Real estate (+1.0%) was the day’s bright spot, clawing back earlier losses as falling yields supported the group.

In corporate news, Broadcom (AVGO 334.89, +9.41%) surged nearly 9.5% after a strong Q3 report and the disclosure of a major new AI customer — rumored to be OpenAI — which sparked competitive worries for NVIDIA (NVDA -2.7%) and AMD (AMD -6.6%). Still, semiconductor stocks as a whole managed to rally into the close, lifting the PHLX Semiconductor Index 1.7% even as the broader tech sector slipped 0.2%.

Overall, today’s action highlighted a market wrestling with the push-and-pull of softer economic data — which supports rate cuts — against the reality of cooling growth. The afternoon rebound from session lows suggests investors aren’t ready to abandon risk just yet, but caution remains evident heading into the next round of data releases.

Our model portfolio FTInvest 11 spent most of today’s session in negative territory, struggling to gain traction after a strong week. But a steady late-session recovery saw the index climb back into positive territory, finishing the day up 0.07% at a fresh record closing level of 854.05.

This small daily gain capped a robust week for the portfolio, which advanced 1.29%, far outpacing the S&P 500’s more modest 0.33% weekly rise. The result underscores FTInvest 11’s continued leadership relative to the broader market, even as sentiment has turned cautious ahead of upcoming macroeconomic data releases.

The ability of FTInvest 11 to push to new record highs despite early pressure highlights its resilience and suggests that the portfolio continues to benefit from strong participation across its key components. With the index closing the week well above its recent consolidation range, attention will now turn to whether it can sustain this momentum into next week and challenge psychological resistance levels above the 855 mark.