By Kristoff De Turck - reviewed by Aldwin Keppens
Last update: Sep 5, 2025
If you're looking for a quiet day on Wall Street, Thursday wasn't it. Between weaker labor data, another round of AI-hyped earnings, and a political chess match playing out at the Federal Reserve, there was no shortage of headlines.
Still, the major indexes powered higher, with the S&P 500 notching a fresh all-time high at 6,502 points.
The August ADP private payroll report showed just 54,000 jobs added, a massive slowdown from the 106,000 in July and well below expectations. On paper, that’s bad news. But for investors? Not necessarily.
A cooler labor market gives the Federal Reserve more leeway to cut interest rates, a prospect markets are clearly embracing. Bond yields retreated modestly, reinforcing the dovish narrative just ahead of Friday’s official U.S. employment report.
The market had high hopes for Salesforce (CRM | -4.85%), but the tech heavyweight left investors underwhelmed. While revenue in Q2 beat expectations - $10.2B vs. $10.1B expected - and EPS came in strong at $2.91 vs. $2.78, the outlook for Q3 was more restrained.
The company forecasts revenue between $10.24B and $10.29B, with the midpoint falling just short of analyst consensus. That raised fresh concerns about whether the AI-fueled growth story is already running out of steam, especially as customers become more cautious amid broader economic uncertainty.
Analysts aren’t abandoning ship, but the optimism is clearly waning. Both JPMorgan and RBC Capital trimmed their price targets, although they maintained buy ratings.
AI may be the future, but the path to monetization looks bumpier than hoped, particularly for Salesforce’s ambitious “Agentforce” AI assistant offering.
Amazon (AMZN | +4.29%) surged on Thursday, becoming one of the S&P 500’s top performers, as investors reacted to a major funding round for AI startup Anthropic, in which Amazon has invested heavily and which relies on its AWS platform.
There was more movement across the sector:
Meanwhile, political undercurrents are swirling at the Federal Reserve.
Stephen Miran, a Trump ally nominated for a Fed seat, told the Senate he wouldn’t give up his White House role if confirmed, a clear departure from the Fed’s tradition of independence. Senators raised eyebrows, but serious opposition was limited.
The broader concern? If Trump regains influence over the Fed, it could reshape U.S. monetary policy significantly. The White House is pressing for a quick confirmation before the September 16–17 Fed policy meeting.
Elsewhere, the U.S. trade deficit widened in July, driven by increased imports from China, despite a narrower gap with the EU. Inflation watchers noted unit labor costs rose more slowly than expected, another signal that inflation pressures may be easing. That also bolsters the case for future rate cuts.
Oil prices eased slightly, the euro/dollar pair hovered near 1.1650, and bond markets - after a volatile week - showed signs of stabilizing.
Don’t overlook Hewlett Packard Enterprise (HPE | +1.49%), which posted a solid earnings beat and reported a 54% jump in net revenue.
The gain came largely thanks to its acquisition of Juniper Networks, a deal that seems to be paying off faster than expected.
Thursday’s session was a reminder that sometimes, bad news (jobs) can be good news (rate cuts), and good news (AI revenue) might not be quite good enough (see Salesforce).
As always, it’s the reaction to the news that reveals the real market sentiment.
Let’s see what Friday’s official jobs report brings. Expect volatility, especially in rates and tech.
Kristoff - ChartMill
Next to read: Market Monitor Trends & Breadth Analysis, September 05 BMO
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