Stock Market Today: August Jobs Miss, Chances of Big Rate Cut Rise

• US stock markets were mixed on Friday after the August jobs report missed economists’ expectations.
• The U.S. economy added 142,000 jobs in August, fewer than the 164,000 expected. The unemployment rate fell to 4.2%.
• “Overall, this is still consistent with an economy experiencing a soft landing,” said economist Paul Ashworth.

U.S. stocks fluctuated Friday after the August jobs report slightly missed economists’ estimates.

The U.S. economy added 142,000 jobs in August, below the average economist estimate of 164,000. The unemployment rate fell to 4.2% from 4.3%.

According to Capital Economics, the report confirms the prospects of a soft landing for the US economy.

“Overall, this is still consistent with an economy making a soft landing rather than falling into recession,” Paul Ashworth, economist at Capital Economics, said in a note after Friday’s jobs report.

The chances of the Federal Reserve making a big rate cut at its September 18 FOMC meeting have increased dramatically following the jobs report.

According to the CME FedWatch Tool, markets are pricing a 51% chance that the Fed will cut rates by 50 basis points later this month, up from 40% on Thursday.

However, Ashworth does not expect this to happen and considers a rate cut of 25 basis points more likely.

“We expect the Fed to start with a 25 basis point rate cut, but we realize it is a close call,” Ashworth said.

According to Chris Zaccarelli, CIO of the Independent Advisor Alliance, the August jobs report could ultimately contribute to an optimistic view of the stock market.

“While the bears have plenty to work with — in terms of a softening labor market and a slowing economy — the evidence still shows an economy that is growing and not headed for a recession anytime soon. For that reason, we believe that once the election is behind us, we will see this bull market climb back to new record highs before the next bear market begins,” Zaccarelli told Business Insider in an email.

Here’s where the US indices stood shortly after the 9:30 a.m. opening bell on Friday:

Here’s what else is going on:

In commodities, bonds and crypto:

• West Texas Intermediate crude rose 0.64% to $69.59 a barrel. Brent crude, the international benchmark, rose 0.56% to $73.10 a barrel.
• Gold fell 0.12% to $2,540.00 an ounce.
• The yield on 10-year government bonds remained stable at 3.732%.
• Bitcoin rose 1.17% to $56,824.