U.S. equities slipped from Thursday's rebound highs by midday Friday after a blowout August payroll report forced traders to price in a genuine chance the Federal Reserve raises rates this month.
Beneath a quiet index tape, the rotation was violent: memory and semiconductor names ripped while software and discretionary retail were gutted.
The U.S. economy added 162,000 jobs in August, nearly triple the 55,000 consensus and a sharp reversal from July's upwardly revised 21,000 increase.
President Donald Trump is pressing for cuts while the rates market moved the opposite direction.
Markets now price a roughly 52% probability of a 25-basis-point increase in the federal funds rate this month, up sharply from Thursday.
Across U.S. equity markets by midday Friday, losses were shallow, but the internals were anything but calm.
The S&P 500 fell 0.3% to 7,725.16, while the Dow Jones Industrial Average shed 250 points, or 0.5%, to 53,436.22.
The Nasdaq 100 slipped 0.3% to 29,408.11, cushioned by chips.
Gold gave back ground as the dollar firmed on the jobs data, falling 0.8% to $4,437 an ounce after briefly cracking lower post-print. Silver dropped 1.2% to $66.14.
Bitcoin Bitcoin (BTC) fell 1.8% to below $80,000.
Friday's Performance In Major U.S. Indices
| Index | Last | % Change | MTD | YTD |
|---|
| S&P 500 | 7,725.16 | -0.3% | +0.5% | +13.6% |
| Dow Jones | 53,436.22 | -0.5% | +0.5% | +11.9% |
| Nasdaq 100 | 29,408.11 | -0.3% | +0.2% | +17.1% |
| Russell 2000 | 2,974.64 | +0.2% | +0.7% | +20.6% |
Updated by 12:45 p.m. ET.
According to market data:
- The Vanguard S&P 500 ETF VOO fell 0.3%.
- The SPDR Dow Jones Industrial Average ETF Trust DIA slid 0.5%.
- The Invesco QQQ Trust QQQ edged up 0.1%.
- The iShares Russell 2000 ETF IWM gained 0.2%.
Memory Melts Up, SaaS Bleeds and a Credit Score Monopoly Breaks
The Technology Select Sector SPDR Fund XLK was the best performer, up 0.7%, followed by the Industrials Select Sector SPDR Fund XLI at 0.4%.
The Consumer Discretionary Select Sector SPDR Fund XLY was the clear laggard, down 1.4%, dragged by the day's retail wreckage, with the Communication Services Select Sector SPDR Fund XLC off 1%, the Health Care Select Sector SPDR Fund XLV down 0.8% and the Energy Select Sector SPDR Fund XLE 0.7% lower alongside softer crude.
At the industry level, the U.S. Global Jets ETF JETS led with a 1.6% gain as lower fuel costs fed through, and the iShares U.S. Home Construction ETF ITB added 0.6%.
The VanEck Gold Miners ETF GDX was the worst industry group, sinking 1.9% with bullion, while the SPDR S&P Insurance ETF KIE fell 0.9%.
Semiconductors and storage were the day's engine.
Astera Labs Inc. Astera Labs (ALAB) topped the Russell 1000 with a 12% surge to $316.86, riding a broad AI-connectivity bid that has analysts carrying an average price target near $390 on the stock.
SanDisk Corp. SanDisk (SNDK) jumped 10.3% to $1,714.87 as the NAND pricing cycle accelerated.
Semtech Corp. Semtech (SMTC) climbed 9.1% with no confirmed catalyst on the day, extending gains that followed Stifel's price-target hike to $157 and Morgan Stanley's call on accelerating AI optical momentum.
KLA Corp. KLA (KLAC) rose 8.2% after Susquehanna lifted its 2026 and 2027 estimates and flagged wafer-fab equipment spending running as high as $300 billion on longer semiconductor-capital-equipment backlogs.
Super Micro Computer Inc. Super Micro (SMCI) gained 7.3%, moving with the AI server and storage complex.
Peers followed: TTM Technologies Inc. TTM Technologies (TTMI) added 6.9%, Coherent Corp. Coherent (COHR) rose 7.0%, Micron Technology Inc. Micron (MU) and Applied Materials Inc. Applied Materials (AMAT) each rose about 4.5%, Western Digital Corp. Western Digital (WDC) advanced 4.4% and Intel Corp. Intel (INTC) gained 4.1%.
Software went the other way, hard.
Guidewire Software Inc. Guidewire (GWRE) was the worst name in the index, collapsing 21% to $160.19. The insurance-software vendor reported fiscal fourth-quarter results after Thursday's close that topped revenue expectations, but a price-to-earnings multiple above 100 left no room for anything less than a clean beat on subscription growth, and the stock had already faded from an intraday high above $204.
Autodesk Inc. Autodesk (ADSK) fell 7.9% with no confirmed catalyst on the day — its quarter was reported back on Aug. 27 — making it a casualty of the broader de-rating in design and enterprise software on AI disruption fears.
Adobe Inc. Adobe (ADBE) dropped 6.3% after naming insider Anil Chakravarthy chief executive days ahead of earnings, a continuity pick that did little to answer questions about its AI strategy.
Synopsys Inc. Synopsys (SNPS) lost 5.4%, Zscaler Inc. Zscaler (ZS) fell 4.7% and Workday Inc. Workday (WDAY) slid 4%.
UiPath Inc. UiPath (PATH) tumbled 16.7% despite delivering a clean quarter Wednesday evening. Revenue rose 13% to $410.3 million, beating consensus by roughly $12.5 million, and the company logged its fourth straight quarter of GAAP profitability with $31.6 million in operating income.
The problem sat in the guide: third-quarter revenue of $440 million to $445 million implies roughly 8% growth, about half the pace just delivered.
Fair Isaac Corp. Fair Isaac (FICO) plunged 16.6% to $933.80 after Federal Housing Finance Agency Director Bill Pulte instructed Fannie Mae and Freddie Mac to approve all lenders to use VantageScore, effectively ending the company's mortgage credit-scoring monopoly. Mortgage originations account for roughly 71% of Fair Isaac's B2B Scores revenue.
The credit bureaus fell with it as Pulte renewed his criticism of scoring costs: TransUnion TransUnion (TRU) lost 7.1% and Equifax Inc. Equifax (EFX) fell 6.3%.
Retail split down the middle.
Lululemon Athletica Inc. Lululemon (LULU) crashed 17.5% to $100.49 after second-quarter revenue fell 4% to $2.4 billion and comparable sales dropped 10%. Reported EPS of $2.92 cleared estimates, but $134.5 million in tariff refunds contributed 86 cents of that.
Management cut full-year revenue guidance to $10.35 billion to $10.5 billion against $11.03 billion consensus and EPS to $9.48 to $9.73 versus $10.84, with third-quarter revenue guided to a 10% to 11% decline.
Interim CEO Meghan Frank pointed to negative social media commentary and a greater-than-expected slowdown in core categories including leggings.
The mirror image was Five Below Inc. Five Below (FIVE), up 6.9% to $256.62 and still climbing days after its print. The discounter grew net sales 22.9% to $1.26 billion with comparable sales up 14.1%, delivered adjusted EPS of $1.68 against $1.33 consensus, expanded gross margin to 35.6%, and raised full-year revenue guidance to $5.63 billion to $5.71 billion and adjusted EPS to $9.83 to $10.31, both well ahead of the Street.
Elsewhere in the red, T-Mobile US Inc. T-Mobile (TMUS) fell 3.9% and rate-sensitive high-multiple names including Palantir Technologies Inc. Palantir (PLTR) and Coinbase Global Inc. Coinbase (COIN) each shed close to 4%.
