U.S. August Nonfarm Payrolls Set to Draw Attention as Broadcom and Lululemon Prepare to Report Earnings【The week ahead】

TradingKey - U.S. stocks closed at record highs last week, yet the three major indexes ended the period in negative territory. The S&P 500 declined 0.1% for the week, while both the Dow Jones Industrial Average and the Nasdaq Composite fell 0.19%. This week’s spotlight falls on Friday’s release of the August U.S. nonfarm payrolls report—an important barometer of economic health and a key test of market expectations for Federal Reserve rate cuts. Other data to watch include the August ADP employment change, the ISM non-manufacturing index, and the final July durable goods orders. The Fed will also publish its Beige Book on regional economic conditions. On the earnings front, investors will be closely watching results from Broadcom (AVGO.US), Salesforce, C3.ai, Lululemon, and NIO.

Preview of major events

August Jobs Report Due Friday, Set to Deliver Key Monetary Policy Clues for Investors

This Friday, markets will receive the U.S. August nonfarm payrolls report. The impact of the July jobs data stemmed not only from the weaker-than-expected headline figure—73,000新增 jobs versus an expected 110,000—but also from significant downward revisions to May and June, which showed minimal job gains during those months. Forecasts now suggest the August unemployment rate will edge up further to 4.3% from 4.2%, while nonfarm payroll growth is expected to remain below 100,000 at 78,000.

Goldman Sachs traders believe Fed Chair Jerome Powell has already signaled the green light for a September rate cut. However, the August employment report will be pivotal in determining the size and pace of those cuts. A gain of fewer than 100,000 jobs would bolster the case for a cut later this month.

Can Broadcom’s AI Business Carry the Growth Torch?

Broadcom is set to release its latest quarterly earnings on September 4, with analysts expecting the semiconductor and software giant to report a 21% year-over-year increase in third-quarter revenue to $15.82 billion, and earnings per share of $1.66, up from $1.24 a year earlier.

Much of the market’s focus will likely center on its artificial intelligence business. That segment reached $4.4 billion in revenue in the second quarter—up 46% year-over-year—and the company has projected AI-related revenue to rise to $5.1 billion in the most recent reporting period. If figures meet expectations, AI would account for roughly one-third of Broadcom’s total revenue and mark the tenth consecutive quarter of annualized growth for the business.

Fed Releases Beige Book on Economic Conditions

On Thursday, the Federal Reserve will release its latest Beige Book. The previous report, covering economic activity from late May to early July, showed a modest increase in economic conditions. Notably, mentions of inflation hit a four-year low with only five references—down from 10 in the prior report—while the word “slowing” appeared more frequently, reaching its highest count since October of last year.

Goldman Sachs argues that the core risks facing U.S. markets and the economy are no longer centered on private-sector financial excesses, but rather on the growing challenges of elevated public-sector debt and stretched asset valuations.

Selected Economic Data

Tuesday: U.S. August ISM Manufacturing PMI

Thursday: U.S. August ADP Employment Change (in millions)

Friday: U.S. August Nonfarm Payrolls, Seasonally Adjusted (in millions)

This week's featured events

Monday: ECB President Lagarde Speaks

Thursday: FOMC Permanent Voter and New York Fed President Williams Speaks

Friday: 2025 FOMC Voter and Chicago Fed President Goolsbee Speaks

Corporate Earnings

Tuesday: NIO (NIO.N)

Thursday: Broadcom (AVGO.O)