Stocks Took a Jobs Report Hit. This Matters More to the Fed—and Markets.
Sep 08, 2025 06:28:00 -0400 | #Markets #The Barron's Daily
(Spencer Platt/Getty Images)
Bad news from the jobs report is trouble for the stock market—or is it? Panic about tepid employment growth seems to be creeping in, but uncertainty over immigration could mean things aren’t as worrisome as they seem.
Stocks have been sitting pretty recently at record highs. Friday’s jobs report brought them down with a bump, as lower-than-expected employment growth ignited fears of a slowing economy. Chuck in another set of downward revisions to previous months—meaning June was actually the first negative month for jobs since 2020—and the picture begins to look bleak.
But events in Georgia suggest the payroll report might be a little misleading. The immigration raid at a Hyundai plant on Thursday was a reminder the Trump administration is serious about deporting alleged “illegal workers,” even at the cost of a diplomatic spat with the South Korean government over the weekend.
That affects the labor market. Economists at Deutsche Bank estimate that, accounting for reduced immigration and higher deportations, the breakeven rate—the number of jobs needed each month to keep the unemployment rate steady—might be as low as 50,000 a month. August’s 22,000 additions look less concerning in that light.
That might account for why few traders are pricing in a less than 10% chance of a jumbo 50-basis points interest-rate cut from the Federal Reserve this month, according to the CME FedWatch tool. With uncertainty over the true state of the jobs market, this week’s inflation data could take precedence in determining the central bank’s urgency in cutting rates.
Trump’s mass deportation plans come with their own complications—the construction, agriculture, and hospitality sectors could face labor shortages. But at least in the short term, the gloom in the jobs market needn’t cast a shadow over stocks.
*** The final third of 2025 is off to a troubling start. Stocks are sliding, bond yields are rising, gold is soaring, and questions are swirling about the future of President Trump’s tariff strategy and the makeup of the Federal Reserve. Join Barron’s senior managing editors Lauren Rublin and Ben Levisohn today at noon when they discuss the investment forecast and stocks in the news. Sign up here.
***
Trump’s Approval Ratings Fall Amid Inflation, Tariff Worries
President Donald Trump’s job approval rating fell in the most recent NBC News poll, showing the number of adults who strongly or somewhat approve of his job performance was 43% versus 45% in June. Approval of his handling of trade and inflation scored the lowest among other issues.
- About 41% of voters strongly or somewhat approved of Trump’s handling of trade, and 39% of inflation. On border security, 47% strongly or somewhat approved, while 43% said the same about deportations. About 45% of adults named inflation and the rising cost of living as their most important economic issues.
- Treasury Secretary Scott Bessent said if the Supreme Court strikes down the administration’s tariffs, which it imposed under emergency powers, the Treasury would be forced to refund about half of what it has collected, “which would be terrible.” But he told NBC News he was confident the administration would prevail.
- Bessent wouldn’t acknowledge that tariffs are “a tax” on Americans, despite estimates by companies such as Deere, Nike, and Black & Decker that tariffs were costing them money. Goldman Sachs research found that 86% of the tariff revenue collected so far has been paid by American businesses and consumers.
- The Trump administration is prepared to exempt a number of imports from its so-called reciprocal tariffs starting today for some countries after President Trump signed an executive order late Friday. The administration said it would make the exemptions for countries that have reached deals with the U.S.
What’s Next: This week’s big economic reports include the consumer price index for August, due out on Thursday, and Tuesday’s revisions for jobs data from the Bureau of Labor Statistics. Downward revisions are expected and, if severe enough, could put a jumbo rate cut in play at the Fed.
— Liz Moyer and Dan Lam
***
It’s a Big Week for IPOs: Klarna, Gemini Set to Debut
The initial public offering market is getting hotter, even as the summer’s heat gives way to autumn chills. Six companies are in line to make their debuts this week, according to Renaissance Capital, including fintech Klarna and the cryptocurrency exchange Gemini Space Station, backed by the billionaire Winklevoss twins.
- Also on tap are the building engineering and maintenance firm Legence, blockchain lending platform Figure, public transit software services provider Via Transportation, and Black Rock Coffee. The chain isn’t linked to the asset-management company BlackRock.
- Klarna is currently planning to raise about $1.3 billion from the sale, for a $14 billion valuation. Gemini intends to raise approximately $300 million, for a $2.3 billion valuation. Both companies could boost the sizes of their offerings, and their price ranges, before their stocks begin trading.
- If recent trading trends are any guide, this week’s IPO shares could pop once they start trading. The IPO market has enjoyed a healthy comeback as of late, along with the broader market. Stablecoin issuer Circle Internet Group, the design software developer Figma, and crypto platform Bullish have all debuted.
- But while these and other IPOs posted eye-popping returns out of the starting gate, all three have pulled back since then. Some analysts are expressing caution about the hype surrounding this coming crop of IPOs. Gemini and Klarna, which lost $52 million in the second quarter, are in focus.
What’s Next: Analysts said there could be more attractive entry points after these companies release their first earnings reports in a few months. Newly public stocks also often fall once insiders are allowed to sell shares after lockup periods expire, typically 180 days from their IPO date.
***
Apple’s Product Event Is Coming. What to Expect.
Apple will host its annual product event on Tuesday, and investors are looking for new features and capabilities that could spur customers to buy new devices as part of a larger upgrade cycle. The iPhone accounts for roughly half of Apple’s revenue so expect the stock to move on anything unexpected related to its key profit driver.
- As of now, expectations for iPhone sales remain modest. Wall Street analysts tracked by FactSet expect 232 million of the devices to be sold in the fiscal year ending in September 2026, up 2% from the 2025 fiscal year. They see iPhone sales reaching $220 billion in fiscal 2026, up 5%.
- In a research note on Thursday, Morgan Stanley analyst Erik Woodring said Apple could modestly raise the pricing for some of its smartphones. “What will matter most at next week’s iPhone launch event is pricing, a still under-appreciated growth tailwind,” he wrote.
- The analyst said one way Apple could effectively raise prices is by eliminating smaller-storage models. Apple may decide to ditch the 128-gigabyte version of the iPhone Pro, which would make the 256 gigabyte model the entry level device—costing $100 more at $1,099—he said.
What’s Next: Don’t expect much news on the company’s rollout of artificial-intelligence software. Apple stock has fallen 4.3% this year, versus a 12% rise for the tech-heavy Nasdaq Composite . One major reason for the decline is investor disappointment about AI. An updated Siri chatbot is in the works but Apple said it doesn’t expect to launch a more personalized version until sometime next year.
—Tae Kim and Angela Palumbo
***
Google Dodged the Worst, But Its Antitrust Issues Aren’t Over
The government’s antitrust case against Google and its search business ended with a whimper, with the tech giant avoiding the harshest of possible remedies. Still, there are significant antitrust dangers in front of Alphabet-owned Google that investors seem to have overlooked.
- U.S. District Judge Amit Mehta acknowledged that times have changed since Google’s search business was found to be a monopoly. In the late 2023 “liability” phase of the trial, no one brought up artificial-intelligence search engines. Now, Google faces real competition from ChatGPT, Perplexity, and others.
- Google won’t have to sell its Chrome browser, but it didn’t get away unscathed. A potential time bomb in Mehta’s ruling are data-sharing remedies the court imposed. Mehta left in some crucial parts that, with a lot of time, talent, and investment, could enable competitors to reverse engineer Google Search.
- Mehta said Google could continue making payments to Apple, which can keep its search engine as the default option on Apple devices. That added up to $20 billion three years ago. But Mehta said he could still revisit this part of the ruling over the six-year term of his decision.
- Then there are possible appeals. Neither Google nor the Justice Department would commit to appealing but the DOJ seemed open to the idea, saying it would “continue to review the opinion to consider the Department’s options and next steps regarding seeking additional relief.”
What’s Next: There will be more cases around Google antitrust, both abroad and in the U.S., including one about Google’s advertising network. The liability phase of this trial concluded in April with Google being declared an illegal monopoly for the second time. The remedies phase begins later this month.
***
Warner Bros. Tops Box Office Again as Horror Genre Dominates
Warner Bros. topped the weekend box office again, adding to a string of hits for the studio this year, with two of the weekend’s top-grossing movies. Representing the horror genre, The Conjuring: Last Rites sold $83 million domestically in its first weekend, while Weapons added another $5.4 million.
- Summer box office sales fell short of the high expectations set after a record-breaking Memorial Day at the theater. Hollywood had hoped to crack the $4 billion mark domestically, but summer box office sales through Labor Day reached just $3.673 billion, about even with a year ago, Comscore said.
- The horror genre has generated buzz, however. Comscore data show horror films generated nearly $1 billion in sales heading into this weekend, and The Conjuring: Last Rites’ first place showing pushed it over that mark, Comscore senior media analyst Paul Dergarabedian said.
- Last Rites, the latest chapter in Warner Bros.’ Conjuring cinematic universe, sold another $104 million internationally for an estimated $187 million worldwide opening, according to Comscore.
- Walt Disney’s film of the original Broadway hit musical Hamilton won second place for the weekend with a $10 million domestic opening. Weapons was third, and Disney’s PG-rated Freakier Friday, a sequel to the 2003 hit, was fourth place.
What’s Next: This weekend’s $124 million in tickets sold through Sunday brings the yea’s domestic box office sales total to $6.14 billion, or 3.9% higher than this time in 2024. That’s still 23% below 2019, Dergarabedian said.
***
—Newsletter edited by Liz Moyer, Patrick O’Donnell, Rupert Steiner