Stocks wobble as Wall Street wrangles with whether the job market is too weak

NEW YORK (AP) — U.S. stocks wobbled lower on Friday as Wall Street questioned whether the U.S. job market has slowed by just enough to get the Federal Reserve to cut interest rates to help the economy, or by so much that a downturn may be on the way.

After rising to an early gain, the S&P 500 erased it and fell 0.3% below the all-time high it set the day before. The Dow Jones Industrial Average dropped 220 points, or 0.5%, after swinging between an early gain of nearly 150 points and a loss of 400. The Nasdaq composite edged down by less than 0.1%.

The action was more decisive in the bond market, where Treasury yields tumbled after a report from the Labor Department said U.S. employers hired fewer workers in August than economists expected. The government also said that earlier estimates for June and July overstated hiring by 21,000 jobs.

The disappointing numbers follow last month’s discouraging jobs update, along with other lackluster reports in intervening weeks, and traders are now betting on a 100% probability that the Fed will cut its main interest rate at its next meeting on Sept. 17, according to data from CME Group. Investors love such cuts because they can give a kickstart to the economy, but the Fed has held off on them because they can also give inflation more fuel.

So far this year, the Fed has been more worried about the potential of inflation worsening because of President Donald Trump’s tariffs than about the job market. But Friday’s job numbers could push the Fed to consider cutting rates in two weeks by a steeper amount than usual, said Brian Jacobsen, chief economist at Annex Wealth Management.

“This week has been a story of a slowing labor market, and today’s data was the exclamation point,” according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.

Strong hiring for health care jobs had been helping to support the overall market, “but with it now showing some tangible signs of decline, the foundation underneath the labor market seems to be cracking,” said Rick Rieder, chief investment officer of global fixed income at BlackRock.

While the data on the job market is disappointing, it’s still not so weak that it’s screaming a recession is here, and the U.S. economy is continuing to grow. A big question for investors is whether the job market can remain in a balance where it’s not so strong that it prevents cuts to interest rates but also not so weak that the economy falls off.

Uncertainty about that helped lead to Friday’s swings in the stock market. Wall Street needs things to go as hoped because it already sent stock prices to records amid expectations for a Goldilocks scenario where interest rates ease, and the economy keeps chugging along.

On Wall Street, Friday’s heaviest weight was Nvidia, the chip company that’s become the face of the artificial-intelligence boom. It’s been contending with criticism that its stock price charged too high, too fast and became too expensive following Wall Street’s rush into AI, and it fell 2.7%.

Lululemon dropped 18.6% after the yoga and athletic gear maker’s revenue for the latest quarter fell short of analysts’ expectations. CEO Calvin McDonald pointed to disappointing results from its U.S. operation, while Chief Financial Officer Meghan Frank said Lululemon is facing “industrywide challenges, including higher tariff rates.”

Still, more stocks rose on Wall Street than fell. Leading the way was Broadcom, which climbed 9.4% after reporting better profit and revenue for the latest quarter than analysts expected. CEO Hock Tan said customers are continuing to invest strongly in AI chips.

Tesla rose 3.6% after proposing a payout package that could reach $1 trillion for its CEO, Elon Musk, if the electric vehicle company meets a series of extremely aggressive targets over the next 10 years.

Smith & Wesson Brands jumped 6.5% after the gun maker delivered better results for the latest quarter than analysts expected. CEO Mark Smith said it saw good demand for new products in what’s traditionally a slow season for sales of firearms.

All told, the S&P 500 fell 20.58 points to 6,481.50. The Dow Jones Industrial Average dipped 220.43 to 45,400.86, and the Nasdaq composite slipped 7.31 to 21,700.39..

In stock markets abroad, indexes in Europe lost early gains to turn lower with Wall Street. That followed strength across much of Asia.

The Nikkei 225 rallied 1% in Tokyo after data showed accelerating growth in earnings for Japanese workers. Chinese markets rebounded following three days of decline, with indexes rising more than 1% in both Hong Kong and Shanghai.

In the bond market, the yield on the 10-year Treasury dropped to 4.09% from 4.17% late Thursday and from 4.28% on Tuesday. That’s a notable move for the bond market and could mean lower interest rates are coming for mortgages and other loans.

AP Writers Matt Ott and Teresa Cerojano contributed.

Trader Drew Cohen, foreground, works with colleagues on the floor of the New York Stock Exchange, Friday, Sept. 5, 2025. (AP Photo/Richard Drew)

FILE - A sign outside the New York Stock Exchange marks the intersection of Wall and Broad Streets, Tuesday, Jan. 28, 2025, in New York. (AP Photo/Julia Demaree Nikhinson, File)

FILE - In this Jan. 10, 2020, file photo, the Charging Bull stands in Manhattan's financial district in New York. (AP Photo/Mark Lennihan, File)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won, top right, at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Thursday, Sept. 4, 2025. (AP Photo/Ahn Young-joon)

FILE - The Fearless Girl statue stands in front of the New York Stock Exchange in New York's Financial District on Tuesday, Nov. 5, 2024. (AP Photo/Peter Morgan, File)

ANCHORAGE, Alaska (AP) — A state appeals court will decide whether to dismiss felony voter misconduct charges against an Alaska resident born in American Samoa, one of numerous cases that has put a spotlight on the complex citizenship status of people born in the U.S. territory.

The Alaska Court of Appeals heard arguments Thursday in the case against Tupe Smith, who was arrested after winning election to a regional school board in 2023. Smith has said she relied on erroneous information from local election officials in the community of Whittier when she identified herself as a U.S. citizen on voter registration forms.

American Samoa is the only U.S. territory where residents are not automatically granted citizenship by being born on American soil and instead are considered U.S. nationals. Paths to citizenship exist, such as naturalization, though that process can be expensive and cumbersome.

American Samoans can serve in the military, obtain U.S. passports and vote in elections in American Samoa, but they cannot hold public office in the U.S. or participate in most U.S. elections.

Smith's attorneys have asked the appeals court to reverse a lower court's decision that let stand the indictment brought against her. Smith's supporters say she made an innocent mistake that does not merit charges, but the state has argued that Smith falsely and deliberately claimed citizenship.

State prosecutors separately have brought charges against 10 other people from American Samoa in Whittier, including Smith’s husband, Michael Pese.

Thursday's arguments centered on the meaning of the word intentionally.

Smith “and others like her who get caught up in Alaska’s confusing election administration system and do not have any intent to mislead or deceive should not face felony voter misconduct charges,” one of her attorneys, Whitney Brown, told the court.

But Kayla Doyle, an assistant attorney general, said that as part of ensuring election integrity, it's important that oaths being relied upon are accurate.

About 25 people gathered on a snowy street outside the Anchorage courthouse before Thursday’s hearing to support Smith. Some carried signs that read, ”We support Samoans.”

State Sen. Forrest Dunbar, a Democrat who attended the rally, said the Alaska Department of Law has limited resources.

“We should be going after people who are genuine criminals, who are violent criminals, or at least have the intent to deceive,” he said.

In a court filing in 2024, one of Smith's previous attorneys said that when Smith answered questions from the Alaska state trooper who arrested her, she said she was aware that she could not vote in presidential elections but was “unaware of any other restrictions on her ability to vote."

Smith said she marks herself as a U.S. national on paperwork. But when there was no such option on voter registration forms, she was told by city representatives that it was appropriate to mark U.S. citizen, according to the filing.

Smith “exercised what she believed was her right to vote in a local election. She did so without any intent to mislead or deceive anyone,” her current attorneys said in a filing in September. “Her belief that U.S. nationals may vote in local elections, which was supported by advice from City of Whittier election officials, was simply mistaken.”

The state has said Smith falsely and deliberately claimed citizenship. Prosecutors pointed to the language on the voter application forms she filled out in 2020 and 2022, which explicitly said that if the applicant was not at least 18 years old and a U.S. citizen, “do not complete this form, as you are not eligible to vote.”

The counts Smith was indicted on “did not have anything to do with her belief in her ability to vote in certain elections; rather they concerned the straightforward question of whether or not Smith intentionally and falsely swore she was a United States citizen,” Doyle said in a court filing last year.

One of Smith's attorneys, Neil Weare, co-founder of the Washington-based Right to Democracy Project, has said the appeals court could dismiss the case or send it back to the lower court “to consider whether the state can meet the standard it has set forth for voter misconduct.” The state also could decide to file other charges if the case is dismissed, he said.

The court did not give a timeline for when it would issue a ruling.

Bohrer reported from Juneau, Alaska.

State Sen. Forrest Dunbar, left, stands with supporters of Tupe Smith gathered Thursday, Jan. 15, 2026, outside the Boney Courthouse in Anchorage, Alaska, ahead of the Alaska Court of Appeals hearing a challenge to the voter misconduct case brought against American Samoa native Tupe Smith by the state. (AP Photo/Mark Thiessen)

Supporters of Tupe Smith gather outside the Boney Courthouse in Anchorage, Alaska, Thursday, Jan. 15, 2026, ahead of the Alaska Court of Appeals hearing a challenge to the voter misconduct case brought against American Samoa native Tupe Smith by the state. (AP Photo/Mark Thiessen)

Michael Pese and his wife, Tupe Smith, stand outside the Boney Courthouse in Anchorage, Alaska, Thursday, Jan. 15, 2026, ahead of the Alaska Court of Appeals hearing a challenge to the voter fraud case brought against her by the state. (AP Photo/Mark Thiessen)

Michael Pese, left, his wife, Tupe Smith, and their son Maximus pose for a photo outside the Boney Courthouse in Anchorage, Alaska, Thursday, Jan. 15, 2026, ahead of the Alaska Court of Appeals hearing a challenge to the voter fraud case brought against her by the state. (AP Photo/Mark Thiessen)

FILE - Tupe Smith poses for a photo outside the school in Whittier, Alaska, May 13, 2025. (AP Photo/Mark Thiessen, File)