Breakfast News: August Market Momentum
August's market rally saw the S&P 500 gain 1.9%, nearing record highs, with 70% of stocks above key moving averages. Notable performers included Albemarle and Intel. However, September is historically weak for stocks. Key earnings reports from Zscaler, Salesforce, Lululemon, and Broadcom are anticipated. Labor market data this week will inform Fed policy, with expectations of slowing job growth and a slight rise in unemployment. Investors are encouraged to assess their cash versus stock investments.
Breakfast News: August Market Momentum
September 2, 2025
| Friday's Markets |
|---|
| S&P 500 6,460 (-0.64%) |
| Nasdaq 21,456 (-1.15%) |
| Dow 45,545 (-0.2%) |
| Bitcoin $107,962 (-3.63%) |
1. August's Market Rally Shows Strong Breadth
The S&P 500 posted a 1.9% gain during August and finished close to record highs, with improving breadth suggesting the rally is healthy, as nearly 70% of constituents are trading above their 50- and 200-day moving averages.
- Fourth straight monthly gain for the main index: Albemarle (ALB -0.07%) was the best performer, climbing 26.8%, as the lithium producer got a bump thanks to the sharp rise in the lithium price. In second was Intel (INTC -2.29%), which soared 25% after the U.S. government announced a passive investment.
- September a historically weak month for the stock market: The S&P 500 has declined by an average of 4.2% in September during the last five years, with it down by 2% on average during the month over the past decade.
2. Software Earnings Take Center Stage
Hidden Gems recommendation Zscaler (ZS -1.20%) reports after the closing bell on Tuesday. After scoring big client wins last quarter, investors will be watching out for further ambitious growth plans from the cybersecurity business.
- Earnings per share expectations beaten for four straight quarters: After the market closes on Wednesday, Salesforce (CRM 0.72%) releases quarterly earnings. The Rule Breakers rec is expected to show growth in revenue and profits, as AI and cloud adoption continues.
- Two key software-as-a-service providers: Braze (BRZE 1.24%) and DocuSign (DOCU 1.37%) both report Thursday in post-market trading. Last quarter, both companies underwhelmed with updated full-year forecasts.
3. Notable Earnings Continue on Thursday
Stock Advisor rec Lululemon (LULU -1.46%) releases earnings on Thursday after hours, with investors wanting to see if tariff-related pressures and weak macroeconomic sentiment from last quarter has eased off.
- Superscore of 75 in our Moneyball database: Broadcom (AVGO -3.70%) is also scheduled to put out results after the market closes on Thursday, as it continues to ride on the coattails of AI-driven demand.
- Update on North America deal flow likely: Endava (DAVA 0.48%) reports before the market opens on Thursday, with caution ahead following the 24% stock price drop in the week following last quarter's earnings due to a disappointing outlook.
4. Jobs Data to Guide Fed's Policy
Labor market data this week kicks off with Job Openings and Labor Turnover Survey (JOLTS) numbers on Wednesday, with the ADP employment change on Thursday expected to show a monthly net 80k addition, providing a precursor for Non-Farm Payrolls on Friday.
- Data expected to show a slowing labor market: The consensus headline payrolls print is 75k, a small drop from the 73k prior reading, with average hourly earnings likely to fall from 3.9% to 3.7%, and a move higher in the unemployment rate to 4.3% from 4.2% in July.
- Key information to guide the upcoming Federal Reserve meeting: The employment data this week, followed by Producer Price Index and Consumer Price Index inflation readings next week, will influence the monetary policy actions at the September 16-17 Fed meeting.
5. Your Take
How much of your investment portfolio is sitting in cash versus being invested in stocks, and why that percentage right now? Discuss with friends and family, or become a member to hear what your fellow Fools are saying.
