US stocks closed lower on Friday after weaker-than-expected August jobs data raised concerns about a slowing economy, even as expectations for Federal Reserve rate cuts firmed. The S&P 500 gave up earlier gains, ending 0.3% lower and below Thursday’s record close, the Dow dropped 220 points, while the Nasdaq 100 was flat. The economy added just 22K jobs, well below the 75K forecast, while the unemployment rate rose to 4.3%, highlighting a cooling labor market. Traders priced in a higher chance of interest-rate cuts, with bets rising on a potential 50bps reduction this month. Banks, energy, and industrials sectors led the decline, while real estate gained on rate-cut optimism. Broadcom jumped 9.4% on strong AI-driven revenue forecasts, while Nvidia dropped 2.7% and AMD fell 6.6% after President Trump’s warning of semiconductor tariffs. Lululemon tumbled 18.6% following a second profit warning, and major banks, including JPMorgan and Wells Fargo, fell over 2.5%.

Key economic releases next week will continue to shape the outlook on global rates as softening labor markets and stubborn inflation prelude an inflection point for central banks. Such releases will be headlined by consumer and producer inflation rates in the United States. Additionally, the preliminary annual benchmark revisions to nonfarm payroll numbers will retain attention for the series following a batch of pessimistic readings. In turn, leading indicators will also be featured with University of Michigan consumer confidence index. Elsewhere, the ECB is due to hold its rates unchanged and update its macroeconomic projections. Germany, France, and the UK are due to post industrial production, with the latter also updating its monthly GDP. In China, economic policy announcements may be made as key officials meet. Also, inflation is expected from China and India.

The yield on the 10-year US Treasury note fell sharply to 4.10% on Friday, the lowest in five months, as evidence of a sharper deterioration in the US labor market favored a dovish outlook for the Fed and moved investors to safe assets. Nonfarm payrolls rose by 22 thousand in August, well below expectations of a 75 thousand increase to consolidate the aggressive downturn in payroll growth since May, while the unemployment rate rose to its highest since 2021. The result consolidated expectations that the Fed will restart its cutting cycle with a 25bps reduction in rates this month, while rate traders swung to favor three total rate cuts this year. Still, the softer drop for yields in 30-year bonds, which are still higher year-to-date, indicated that inflationary concerns due to tariffs and expansionary fiscal policy remain, limiting the cutting room for the Fed later in the cycle.

The unemployment rate in Canada rose 0.2 percentage points to 7.1% in August 2025, the highest level in four years, above market expectations of 7% and higher than the 6.9% recorded in July. This was in line with the Bank of Canada's assessment that a large supply of labor and increasing growth concerns due to tariffs and uncertain economic policy from the US threatened further deterioration in the domestic labor backdrop. The number of unemployed people increased to about 1.595 million. This coincided with a 66,000 drop in net employment, extending the 41,000 decrease in July, as the participation rate fell by 0.1 percentage points to 65.1%. In turn, youth unemployment remained elevated at 14.5%, largely due to slow hiring for seasonal summer jobs.

The FAO Food Price Index was at 130.1 in August 2025, the highest since February 2023, and little changed from 130 in July. Vegetable oil prices went up 1.4% to the highest level since June 2022, driven by quotations for palm, sunflower and rapeseed oils, which more than offset a slight decline in soyoil values. Meat cost increased 0.6% to reach a new record high, driven by continuing higher bovine and ovine meat prices, which outweighed stable pig meat quotations and lower poultry meat prices. Also, sugar prices edged up 0.2%, mostly driven by concerns over Brazil’s production outlook, amid reduced sugarcane yields and low sugar recovery rates in key southern growing regions. On the other hand, dairy prices fell 1.3%, reflecting lower international prices for butter, cheese, and whole milk powder. Cereals cost fell 0.8% to the lowest since September 2020. Wheat prices declined amid ample global supplies and subdued import demand, especially from major buyers in Asia and North Africa.

Factory orders in Germany shrank 2.9% mom in July 2025, missing market forecasts of a 0.5% growth and following a downwardly revised 0.2% drop in the prior month. It was the third straight monthly decline and the steepest pace since January, largely due to a 38.6% slump in orders for aircraft, ships, trains, and military vehicles after June’s surge in large-scale contracts. Demand also weakened for electrical equipment (-16.8%), while automotive orders rose 6.5%. Orders fell for capital goods (-2.4%) and intermediate goods (-5.3%) but rose for consumer goods (+4.3%). Foreign demand dropped 3.1%, with falls from both non-euro area (-3.8%) and within the bloc (-2.8%), while domestic orders dipped 2.5%. Excluding large-scale contracts, demand rose 0.7%. On a less volatile three-month average, factory orders edged up 0.2% between May and July, helped by front-loaded demand ahead of U.S. tariff hikes and signs of stabilization in manufacturing across Germany and the broader euro zone.