Market Fluctuations: Stocks, Treasury Yields, and Gold React to Job Growth Data

U.S. stocks reached record highs briefly on Friday before reversing course following data indicating slower job growth in August. This spurred investor speculation that the Federal Reserve might cut interest rates this month by up to 50 basis points. Expectations of such cuts led to plunging Treasury yields and a weaker U.S. dollar, while propelling gold prices to near-record highs at almost $3,600 per ounce.

Lower interest rates generally suggest reduced borrowing costs for businesses, potentially boosting equity markets. Gold, which does not earn interest, tends to perform well amid low rates and heightened uncertainty. Art Hogan, a strategist at B Riley Wealth Management, noted that a 50-basis-point rate cut is now likely at the Fed's September 17 meeting, with a 75-basis-point cut plausible by the year's end.

Nonfarm payrolls increased by only 22,000 in August, missing forecasts. Despite record highs early in the trading day, the S&P 500, Dow Jones, and Nasdaq retreated. Global markets showed mixed performance, with European bond yields easing and commodities like oil and gold experiencing significant price shifts. Spot gold was up 1.3%, hitting a weekly peak, while oil prices declined.

(With inputs from agencies.)