Labor Day to Labor Market: What Shaped the First Week of September

Daniel Ledenev
Sep 6
6 min read

👋 Welcome Back Investors! (September 1 to 5, 2025)

The first week of September kept markets anything but quiet. A weaker U.S. jobs report rattled investors, pulling the Dow lower while the S&P 500 and Nasdaq still managed to notch weekly gains. Bond yields climbed back toward multi-year highs, reigniting debates over fiscal sustainability at home and abroad. In the U.K., borrowing costs surged to a 27-year peak, while gold flirted with record levels above $3,500. Corporate drama also grabbed headlines, with Broadcom delivering stellar AI-driven results and Lululemon slashing guidance in a surprise stumble. From policy fights in Washington to global market jitters, traders had plenty to digest as September kicked off.

👕 Lululemon Craters on Weak Outlook as Tariffs Bite

Lululemon shares plunged nearly 20% in extended trading after the athletic apparel retailer slashed its full year guidance, citing the heavy toll from U.S. tariffs. While the company managed to top earnings estimates with Q2 EPS of $3.10 versus $2.88 expected, revenue came in slightly light at $2.53 billion. Management warned that tariffs would shave $240 million off profits this year, cutting full-year EPS expectations to $12.77–$12.97, far below Wall Street’s forecast of $14.45. Full-year revenue guidance of $10.85–$11.0 billion also lagged consensus.

CEO Calvin McDonald admitted that product lifecycles in core categories like lounge and social wear had “run too long,” leaving offerings stale and missing new trend opportunities. Comparable sales in the Americas fell 4%, dragging total comps to just a 1% gain against estimates of 2.2%. Gross margin slipped 110 bps to 58.5%, and operating margin contracted 210 bps to 20.7%. Same-store weakness contrasted with 30%+ international growth, though overseas momentum wasn’t enough to offset U.S. softness.

Looking ahead, Lululemon guided Q3 revenue to $2.47–$2.50 billion and EPS to $2.18–$2.23, well below expectations. The company is targeting a product reset in 2026, boosting new styles from 23% of its assortment to 35% and accelerating its fast-track design pipeline. Despite its missteps, McDonald insisted the long-term brand remains strong: “We are not satisfied with these results, and we know our brand can and will perform better.” Still, with shares already down more than 45% year-to-date, investors are questioning how quickly Lululemon can reclaim its growth story.

💻 Broadcom Jumps on AI-Driven Sales Surge and Strong Outlook

Broadcom shares climbed this week after the chipmaker posted blockbuster Q3 results fueled by soaring demand for artificial intelligence infrastructure. Revenue came in at $15.9 billion, up 22% year-over-year, with AI-related sales alone rising 63% to $5.2 billion. Net profit surged to $5.5 billion, or $12.35 per share, easily topping analyst estimates. CEO Hock Tan credited hyperscale data center operators and cloud providers for driving the record growth, noting that AI now accounts for nearly a third of Broadcom’s total revenue. The company also issued bullish guidance, projecting Q4 revenue of about $17.4 billion, well above Wall Street’s $16.9 billion forecast. Investors cheered the upbeat outlook, viewing Broadcom as one of the clearest beneficiaries of the ongoing AI investment cycle. Gross margin held steady at an impressive 75%, underscoring Broadcom’s pricing power across semiconductors and networking products.

While AI growth stole the spotlight, the company also saw steady performance in its software unit, including VMware, which it acquired in 2023. Broadcom said it expects synergies from that deal to continue lifting margins. Analysts pointed out that Broadcom’s balanced portfolio split between chips for data centers and enterprise software positions it uniquely compared to peers heavily exposed to consumer electronics. Shares rose following the earnings release, with several Wall Street firms raising their price targets. Still, some strategists cautioned that expectations are running hot: AI momentum must continue to justify Broadcom’s premium valuation. For now, though, Broadcom’s results reaffirm its role as one of the biggest corporate winners in the AI arms race.

👷 U.S. Jobs Growth Slows Sharply in August

The August labor report signaled a clear slowdown in hiring, with nonfarm payrolls rising just 22,000 compared to expectations for roughly 75,000. The unemployment rate climbed to 4.3%, its highest in more than three years, while wage growth slowed to 0.2% month-over-month and 3.8% year-over-year, pointing to easing inflation but also weaker consumer support. Markets wavered on the release, as equities slipped and Treasury yields retreated slightly, with investors debating whether the softer labor data could push the Federal Reserve toward rate cuts later this year. Economists noted the slowdown continues a trend of job gains averaging just above 100,000 in recent months, less than half the pace seen in 2022–23, suggesting the labor market is cooling at a steady pace. Weakness in retail and temporary hiring contrasted with resilience in healthcare and government jobs, reinforcing the view that while the labor market has not entered contraction, momentum is clearly fading, and policymakers face a delicate balance between protecting growth and managing inflation.

🟡 Gold Hits Record High Amid Global Uncertainty

The price of gold surged to a new all-time high of $3,508.50 per ounce this week, extending a rally that has lifted the metal nearly a third since January. Investors piled into the safe-haven asset as global economic uncertainty deepened, fueled by President Trump’s sweeping tariffs, persistent U.S. and China trade tensions, and concerns over the independence of the Federal Reserve. Analysts noted that expectations of Fed rate cuts have also boosted gold’s appeal by lowering the opportunity cost of holding non-yielding assets. Demand remained resilient in China and India, where buyers shifted from jewelry to investment products like bars and coins, preventing the usual slowdown seen at higher prices. ECB President Christine Lagarde warned that political pressure on the Fed could represent a “serious danger” to global stability, further driving safe-haven flows. Beyond U.S. politics, factors like Russia’s war in Ukraine, shifting trade policies, and earlier dollar weakness have all added fuel to the rally, cementing gold’s status as one of the year’s standout assets.

🌍 Developing Nations Shift Away from Dollar Debt

A growing number of emerging economies are cutting exposure to costly U.S. dollar borrowing and turning to lower-rate alternatives like the Chinese renminbi and Swiss franc. Countries such as Kenya, Sri Lanka, Panama, and Colombia are seeking relief as high U.S. interest rates and a steep Treasury yield curve push up debt servicing costs. Kenya is negotiating with China ExIm Bank to repay a $5 billion railway loan in renminbi, while Sri Lanka is exploring renminbi financing to finish a stalled highway project. Panama recently secured $2.4 billion in Swiss franc loans, saving over $200 million in interest compared with issuing in dollars, and Colombia is weighing similar refinancing options.

Analysts say the trend is linked to China’s Belt and Road Initiative as well as Switzerland’s zero-rate policy, but warn these moves are stopgaps rather than permanent solutions. Since most governments earn revenue in dollars or local currencies, borrowing in niche currencies like the renminbi or franc introduces new exchange-rate risks. Still, the shift highlights how developing nations are scrambling to lower costs, diversify away from dollar markets, and buy time while they work to stabilize fiscal positions and regain full access to global capital markets.

👀 Stocks to Watch: What This Week’s Moves Reveal

Markets kicked off September with volatility as a weak U.S. jobs report and a surge in bond yields kept traders on edge. Tech giants helped the Nasdaq secure gains, while consumer names stumbled on disappointing guidance. Here are the standout movers of the week:

Lululemon (LULU) – Crashed nearly 20% after slashing its full-year outlook, warning tariffs would cut profits by $240M. Comparable sales in the Americas dropped 4%, raising questions about the brand’s U.S. momentum.
Broadcom (AVGO) – Gained after reporting $15.9B in Q3 revenue, including a 63% surge in AI-driven sales. The company guided Q4 revenue toward $17.4B, reinforcing its position as a key AI beneficiary.
Tesla (TSLA) – Jumped 3–5% after its board proposed a new performance-based compensation package for CEO Elon Musk, keeping attention on its leadership and long-term growth narrative.
Guidewire (GWRE) – Soared ~20% as earnings and outlook beat expectations, extending a rally in enterprise software names.
Kenvue (KVUE) – Fell more than 9% after controversy around Tylenol and pregnancy-related lawsuits resurfaced, pressuring sentiment around its consumer health portfolio.
Salesforce (CRM) – Dropped over 7% despite posting solid Q2 results, as investors focused on weaker-than-expected bookings growth.

🛎️That’s a Wrap!

The first week of September delivered plenty of action. A weak U.S. jobs report sent markets swinging, bond yields tested fresh highs, and gold broke records above $3,500. On the earnings front, Lululemon tumbled on a profit warning tied to tariffs, while Broadcom soared on booming AI demand. Overseas, developing nations looked to ease pressure by shifting out of dollar debt, underscoring how global finance remains in flux. September is often one of the market’s bumpiest months, and early signals suggest this year may be no exception. Hopefully, everyone enjoyed a well-deserved Labor Day weekend before diving into what promises to be a busy fall stretch.

Until then, stay focused and stay curious. Catch you next week 👋