Dow dropped 410, decliners over advancers better than 3-1 & NAZ retreated 436.  The MLP index fell 2+ to the 279s & the REIT index was off about 1 to the 426s.  Junk bond funds were mixed & Treasuries had limited buying which brought lower yields.  Oil was down 1+ to the 67s & gold dropped 18 to 2525 (more on both below).

Dow Jones Industrials 

Fed Governor Waller backs interest Rate cut at September meeting, open to larger move

Home listings are up more than 60% in some cities

Broadcom's (AVGO) shares sold off, after the chipmaker's tepid revenue forecast spooked investors betting on robust demand for AI chips to drive strong growth.  Chipmakers are bearing the brunt of lofty expectations after a months-long rally in the shares of semiconductor firms, as investors bet heavily on the hardware that supports generative AI technology.  AVGO posted big declines in revenues from its broadband & non-AI networking divisions, while a hike in its forecast for AI chip sales failed to impress growth-hungry investors who have driven a more than 35% increase in its shares so far this year.  The company increased its sales forecast for AI chips by $1B for the fiscal year ending Oct to $12B, in line with widespread expectations.  Artificial intelligence-linked chips are still a bright spot for the company, as Big Tech invests in the datacenter infrastructure necessary to move around the hoards of data used by AI models.  However, its custom AI chip business could see lumpy growth due to its dependence on a limited number of customers spending large amounts of capital.  Revenue from its semiconductor segment, which supplies products for data centers & networking, grew 5% year-on-year in the qtr ending Jul, but just 1% from the previous qtr.  The stock sank 15.83 (10%).

Broadcom shares slump as revenue target disappoints investors hoping for big AI boost

Gold prices eased, retreating from near-record levels reached earlier in the session, after mixed US jobs data cast doubts on the scale of interest-rate cut from the Federal Reserve later this month.  Spot gold fell 0.8% to $2495 per ounce, having hit its highest since Aug 20, when gold last scaled a record peak.  US gold futures settled 0.7% lower at $2524.  A Labor Dept report showed non-farm payrolls rose by 142K in Aug, compared with estimates of 160K.  Jul numbers were also revised down to 89K.  However, the unemployment rate stood at 4.2%, in line with expectations, but down from 4.3% a month earlier.  Traders currently see a 73% chance of a 25-basis-point reduction by the central bank this month & a 27% chance of a 50-bp cut, according to the CME FedWatch tool.  Fed New York Pres John Williams said lowering rates soon will be about helping keep the job market balanced.  Federal Reserve Governor Christopher Waller also said "the time has come" for the central bank to begin a series of interest rate cuts, adding that he is open-minded about the size & pace of those reductions.  Lower interest rates reduce the opportunity cost of holding the zero-yield bullion.

Gold Drops from Near-Record Level as US Jobs Data Blurs Rate Outlook

Oil posted its biggest weekly drop in 11 months as a weak US jobs report added to concerns about tepid demand in the world's largest consumer of crude.  West Texas Intermediate fell 2.1% to settle at $67.67 a barrel, cementing the biggest weekly plunge since Oct 2023.  While the US jobs data increased speculation that the Fed may make a super-sized interest rate cut, it also bolstered the narrative of flagging oil consumption that has weighed on crude prices for weeks.  Recent moves to restrict supplies have failed to arrest crude's decline.  While the OPEC+ coalition this week scrapped a plan to boost output by 180K barrels a day in Oct & Nov, a longer-term plan to revive 2.2M barrels a day over the course of a year remained in place, with the completion date pushed back 2 months to Dec 2025.  Brent futures have trended lower since early Jul, with weakness in the economies of China & the US, the top 2 oil consumers, stoking fears about demand.  Crude production in the world's largest economy has also steadily risen in recent years, adding supply pressure to global balances.  The upshot is that even the OPEC+ delay & an almost 7M-barrel weekly drop in US crude inventories have failed to significantly push up oil prices.  Next week's monthly market outlooks from OPEC, the Energy Information Administration & the Intl Energy Agency will be closely watched.  WTI for Oct fell 2.1% to settle at $67.67 a barrel & Brent for Nov slid 2.2% to settle at $71.06.

Oil Sinks as Weak US Jobs Report Adds to Concerns About Demand

The stock market began the month with a very ugly week with the Dow dropping a big 1218.   Tech stocks after leading the rally this year, also led the decline when AI stocks lost their sex appeal in recent weeks.  When Fed officials talk about interest rate cuts is being ignored, stocks (risk investments) are in trouble.  The Fed meeting will take on major importance in a couple of weeks.