Wall Street rises to a record with hopes for cuts to interest rates
[September 05, 2025] By
STAN CHOE
NEW YORK (AP) — U.S. stocks rose to a record on Thursday as Wall Street
made its final moves ahead of an update on the job market, one that
could clear the way for the cuts to interest rates that investors love.
The S&P 500 added 0.8% to top the all-time high it set last week. The
Dow Jones Industrial Average rose 350 points, or 0.8%, and the Nasdaq
composite gained 1%.
Stocks got some lift from easing pressure from the bond market, where
Treasury yields fell following the latest reports on the U.S. job market
to come in worse than economists expected. One report suggested
employers, not including the government, nearly halved their hiring in
August from the prior month. Another said that more workers applied for
unemployment benefits last week in an indication of rising layoffs.
Neither number is flashing a recession, and a third report on activity
for businesses in the information and other services industries showed
stronger-than-expected growth.
The upside for investors of a slowdown in the job market is that it
could push the Federal Reserve to cut its main interest rate for the
first time this year at its next meeting in a couple weeks. Such cuts
can kickstart the economy and job market, though they can also
accelerate inflation.
So far this year, the Fed has kept its main interest rate on hold
because it’s been more worried about inflation potentially worsening
because of President Donald Trump’s tariffs than about the job market.
“The year started with strong job growth, but that momentum has been
whipsawed by uncertainty,” according to Nela Richardson, chief economist
at ADP. She said several things could be behind the slowdown, including
”labor shortages, skittish consumers, and AI disruptions.”
A more comprehensive report on the job market’s health during August
will arrive on Friday from the U.S. Labor Department, and it will likely
carry much weight with the Fed. Ahead of it, the yield on the 10-year
Treasury fell to 4.16% from 4.22% late Wednesday.
Last month’s grim jobs report, which included massive downward revisions
for June and May, sent financial markets spiraling and prompted Trump to
fire the head of the agency that compiles the monthly data.
On Wall Street, American Eagle Outfitters jumped 38% after the retailer
reported more than double the profit that analysts had expected for its
latest quarter. It benefited from a frenzy of media attention in late
July over a provocative advertising campaign featuring actor Sydney
Sweeney.
The ads — which featured the tagline “Sydney Sweeney has great jeans” —
sparked a debate about race, Western beauty standards, and the backlash
to “woke” American politics and culture.
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People pass the New York Stock Exchange on Nov. 5, 2024, in New
York. (AP Photo/Peter Morgan, File)
 Hewlett Packard Enterprise added
1.5% following its own better-than-expected profit report.
T. Rowe Price climbed 5.8% after announcing a deal where Goldman
Sachs plans to buy up to $1 billion of its stock, or up to 3.5% of
all its shares. They’re teaming up to offer access to some of the
private markets where Goldman Sachs is an expert to the retirement
savers and other investors that T. Rowe Price serves. Goldman Sachs
added 2.5%.
On the losing side of Wall Street was Salesforce, which was the
heaviest weight on the S&P 500 despite reporting a better profit
than analysts expected. Analysts called the performance solid but
suggested some of it may have come from one-time factors. Salesforce,
which helps businesses manage their customers, slumped 4.9%.
C3.ai fell 7.3% after reporting a larger loss for the latest quarter
than analysts expected. Chairman Thomas Siebel called the results
“completely unacceptable,” while announcing a new chief executive
for the company, Stephen Ehikian. He was most recently acting
administrator of the U.S. General Services Administration.
Figma tumbled 19.9% even though the company, which offers a design
and product development platform, reported results for the latest
quarter that roughly matched analysts’ expectations. Figma's
forecasts for upcoming revenue also came close to analysts’, but
expectations may have been even higher given that its stock came
into the day at more than double its $33 IPO price from July.
All told, the S&P 500 rose 53.82 points to 6,502.08. The Dow Jones
Industrial Average climbed 350.06 to 45,621.29, and the Nasdaq
composite rallied 209.97 to 21,707.69.
In stock markets abroad, indexes were mixed across Europe and Asia.
Indexes dropped 1.3% in Shanghai and 1.1% in Hong Kong but jumped
1.5% in Tokyo.
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