MW The S&P 500 must stay above 6,400 for the rally to continue - after August jobs report rattles market, strategist says

By Joseph Adinolfi

'When you are rooting for weaker data to support rate cuts, it's a fine line,' says BTIG's Jonathan Krinsky

There is a new line in the sand that stocks will need to hold to keep the rally going, one technical strategist says.

U.S. stocks were struggling in early-afternoon trading Friday, as the latest jobs data for August helped revive investors' worries about a slowing labor market.

According to one technical strategist, if stock-market bulls want the rally to continue, then it is critical that the 6,400 level on the S&P 500 SPX holds. A break below it could send the index back toward the highs from February, or around 6,150, said Jonathan Krinsky, a technical strategist at BTIG, in commentary shared with MarketWatch.

"When you are rooting for weaker data to support rate cuts, it's a fine line and sometimes it's a function of 'careful what you wish for,'" Krinsky said in written commentary. "For the S&P 500, 6,400 is now a critical level for bulls to hold as we head through September."

Stocks saw a strong start to Friday's session - with the S&P 500, Dow Jones Industrial Average DJIA and Nasdaq Composite COMP touching fresh intraday highs in early going, as traders bet that the Federal Reserve would likely cut interest rates more aggressively in the months ahead than previously expected. Fed-funds futures even showed that chances of a 50-basis-point cut later this month were on the rise, according to data from CME Group.

But as the morning dragged on, investors appeared to shift their focus away from rate-cut hopes and toward the potential economic fallout if fewer Americans end up employed. The data, released earlier, showed the labor market added only 22,000 jobs last month, while revisions to prior periods showed the U.S. economy actually lost jobs in June for the first time since December 2020. The unemployment rate ticked higher to 4.3%.

As stocks slumped, Treasurys rallied, with yields on short-dated Treasurys like the 2-year note BX:TMUBMUSD02Y seeing a particularly large decline. The yield on the 2-year was on track to see its lowest 3 p.m. Eastern time settlement level in three years on Friday, according to Dow Jones Market Data.

See: U.S. unemployment rate jumps to nearly 4-year high as weak job creation in August tees up Fed rate cut

September has historically been the weakest month of the calendar year for stock-market returns, per Dow Jones Market Data.

The S&P 500 was off by 34 points, or 0.5%, at 6,466 in recent trade, while the Nasdaq Composite was down by 71 points, or 0.3%, at 21,634. The Dow was off by 257 points, or 0.6%, at 45,362.

-Joseph Adinolfi

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September 05, 2025 12:38 ET (16:38 GMT)

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