US stocks fall after crucial August jobs report; The Nasdaq fell 2% by Investing.com

Investing.com — U.S. stocks opened mixed on Friday after Labor Department data showed the U.S. economy added fewer jobs than expected in August, fueling expectations that the Federal Reserve may introduce a deeper rate cut at its next policy meeting.

By 10:52 ET (14:52 GMT), the 30 stock was down 282 points, or 0.7 percent, the benchmark was down 74 points, or 1.35 percent, and the tech heavyweight was down 350 of points or 2%.

Non-farm payrolls are below estimates

The U.S. economy added fewer jobs than expected in August but rose from a sharply revised figure in July, according to Labor Department data that could factor into the Federal Reserve’s next policy decisions.

Nonfarm payrolls rose to 142,000 last month, up from a sharply revised downward 89,000 in July. Economists had called for a reading of 164,000, up from July’s initial mark of 114,000.

Friday’s release also showed the U.S. unemployment rate at 4.2 percent, compared with July’s figure of 4.3 percent. The level was in line with estimates.

On a monthly basis, growth in average hourly earnings also edged up to 0.4 percent, after contracting 0.1 percent in July.

After the release, bets that the Fed would introduce a deeper rate cut of 50 basis points — rather than a smaller cut of 25 basis points — rose.

Meanwhile, the rate-sensitive 2-year Treasury yield sold off and its 10-year counterpart pared earlier losses. This has contributed to a steepening of the yield curve, which is again positive. Yields usually move inversely to prices.

Broadcom’s sales outlook is disappointing

Broadcom (NASDAQ: ) shares fell more than 9% in early U.S. trading after the group’s sales guidance for the current quarter slightly missed investor expectations. By 10:52 ET (14:52 GMT), shares were down 10%.

The firm estimated it would generate revenue of $14 billion in the fourth quarter, slightly below estimates of $14.04 billion, according to LSEG data cited by Reuters. The forecast was seen as a sign of a possible slowdown in the company’s non-AI operations.

However, AI segments remained strong, Broadcom said. The firm again raised its outlook for full-year sales of AI parts and custom chips to $12 billion, up from a previous estimate of more than $11 billion in the period.

Other chip stocks, including artificial intelligence darling Nvidia (NASDAQ: ) and peer Advanced Micro Devices (NASDAQ: ), fell following the Broadcom report. Marvell Technology (NASDAQ: ) and Micron Technology (NASDAQ: ) were also lower before the opening bell.

Crude oil is set following labor market data

Oil prices were higher as investors weighed the non-farm payrolls report and factored in both a big draw in US crude inventories and a planned production delay from OPEC+ producers.

At 10:52 ET (14:52 GMT), the contract added 1.3% to $77.78 a barrel, while futures (WTI) also traded up 1.3% at $68.23 per barrel. Both contracts were on track to post declines for the week.

The prospect of lower interest rates — which was boosted by jobs data — typically supports crude oil prices, as a drop in borrowing costs can theoretically help boost economic activity and broader oil demand.

Elsewhere, crude oil inventories fell by 6.9 million barrels to 418.3 million barrels in the week ended Aug. 30, according to the US Energy Information Administration on Thursday. Analysts had forecast a draw of 1 million barrels, Reuters reported.

Meanwhile, the OPEC+ producer group said it had agreed to delay a planned increase in oil output to October and November.

Despite support from these developments, Brent hit a more than one-year low on Thursday due in part to lingering concerns about US and Chinese demand.

Scott Kanowsky and Reuters contributed to this report.