Weekly Market Commentary: Stocks Gain Despite Weak Jobs Data as Rate Cut Expectations Increase

Sunflower Bank Weekly Market Commentary: September 8, 2025

Each week, our Wealth Management team analyzes the U.S. stock market and bond market activity and news of the previous week, summarizing their findings into a weekly market update report. The key points of this week's commentary, "Stocks Gain Despite Weak Jobs Data as Rate Cut Expectations Increase," include:

• Most equity benchmarks rose in the holiday-shortened week despite disappointing jobs data. The S&P 500 gained +0.4%, the Nasdaq 100 rose +1.0%, and the Russell 2000 increased +1.1%. Equities were boosted by a decline in Treasury yields as employment data released last week provided further evidence of a softening labor market. 
• The most consequential event of the week was the August Employment Report released on Friday that includes nonfarm payroll gains and the unemployment rate. Firms reported job gains of 22k in August, below economists’ expectations for 75k adds and below the estimated replacement rate (the number of job gains needed to replace those exiting the workforce).
• The jobs data intensifies pressure on the Federal Open Market Committee to lower the benchmark lending rate. Interest rate futures have fully priced in a cut, with the market-implied probability of a 25-basis point cut following the September meeting at 90%. Interestingly, traders are pricing in a 10% probability of a 50-basis point cut.

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