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JPMorgan analysts on Friday cut their rating on Super Micro Computer (NASDAQ: NASDAQ:SMCI) shares from Overweight to Neutral. SMCI stock slipped less than 1% in premarket trading.

The move comes as Wall Street firm anticipates the company to navigate through current challenges, most notably the evaluation of internal controls and delays in regulatory filings.

JPMorgan highlighted the importance of progress on these filings and Super Micro’s response to competitive pressures in the AI Server market as critical factors to watch in the near to medium term.

Analysts pointed out that the downgrade is not due to a lack of confidence in Super Micro’s ability to regain compliance with regulatory filings nor concerns stemming from the contents of the Hindenburg report.

Instead, the decision is based on “a near-term view where there is a not a clear rationale for new investors stepping into SMCI shares while uncertainty exists around regaining compliance with regulators that is critical beyond the unchanged business fundamentals.”

In addition, it is also driven by the possibility that SMCI could engage in aggressive pricing to retain customers, which could impact margins and elicit a competitive response from industry peers.

“While we expect the company meeting regulatory requirements will potentially be a positive catalyst, we expect investors will also look for evidence of limited changes in customer demand or margin outlooks on account of the recent issues for the shares to fully recover to their prior earnings multiple over time,” analysts continued.

Overall, JPMorgan notes that, given the near-term uncertainty surrounding the company, new investors should wait before taking positions until it regains compliance.

The firm has also reduced its December 2025 price target from $950 to $500, reflecting a lower earnings multiple that aligns more closely with traditional IT hardware companies, which typically experience slower growth.

The U.S. economy reported an increase of 142,000 new jobs in August, falling short of the anticipated 160,000 jobs.

Despite the modest job creation, the unemployment rate remained virtually unchanged at 4.2%, compared to the previous month’s rate of 4.3%.

Average hourly earnings saw an unexpected rise of 0.40% month-over-month, with gains observed across various sectors.

The number of hours worked per week rebounded to an average of 34.3, aligning with the levels recorded from April to June. 

Analysts from Citi have expressed concerns regarding the latest jobs report. They highlighted that the below-consensus figure of 142,000 new jobs, coupled with the downward revisions for previous months and an almost static unemployment rate, did not meet expectations for a recovery from the July slowdown. 

“The figures line up with other signals that the job market is continuing to soften, a classic sign that the US economy is headed into a recession,” Citi economists said in a note.

“The report is not definitive for the size of the September rate cut – our base case is for 50bp.

“[W]e are increasingly convinced the Fed will deliver multiple larger-sized cuts as the job market continues to cool.”

Investing.com — Individual investors are becoming more neutral about the short-term outlook for stocks, according to a new survey.

The report from the American Association of Individual Investors (AAII) found that, in the week ended on Sept. 4, both the amount of optimism and pessimism feeling among these traders had also decreased compared to the prior week.

Neutral sentiment — or the feeling that stocks will neither rise nor fall during the upcoming six-month period — climbed by 7.9 percentage points to 29.8%, although the AAII flagged that this figure was below its historical average of 31.5% for the ninth-straight week.

“Bullish” sentiment, or the expectation that stocks will rally over the next six months, dropped by 5.8 percentage points to 45.3%, the survey showed. However, AAII noted that bullish sentiment topped its historical average of 37.5% for the 43rd time in 44 weeks.

The belief that stocks will dip in the half-year timeframe, or “bearish” sentiment, also slipped by 2.1 percentage points to 24.9%. Bearish sentiment is below its historical average of 31.0% for the fourth consecutive week, the AAI said.

The difference between bullish and bearish sentiment dropped by 3.8 percentage points to 20.4%, although it remains well above its historical avearge of 6.5%.

The AAII added that, when asked whether they would be postponing any investment moves until after the US presidential election in November, 60.0% of respondents said they were sticking with their long-term investment plans. A further 15.9% said they are not delaying investments “right now, but that might change after the election results are known.”

Meanwhile, 9.6% of survey-takers said they would be postponing putting their new money to work until the vote is concluded. Another 9.6% said they had switched to a more conservative allocation.

AAII said the indicator attempts to give investors a “forward-looking perspective” of the market rather than “relying on historical data, which tends to result in hindsight bias.”

Federal Reserve Governor Christopher Waller said today that the current economic data warrants action, suggesting that the Federal Reserve is fully prepared to cut rates.

While speaking at the University of Notre Dame, Waller pointed to the latest jobs data as evidence of a labor market aligning with modest economic growth.

“Today’s job report continues the longer-term pattern of a softening of the labor market that is consistent with moderate growth in economic activity,” he said.

“While the labor market has clearly cooled, based on the evidence I see, I do not believe the economy is in recession or necessarily headed for one soon,” Waller added.

“The time may come for the Fed to act forcefully and quickly to cut interest rates, but it will be based on the data “and not on any pre-conceived notion of how and when the FOMC should act,” Waller said.

Waller said that the August jobs data, which was released on Friday, showed a continuation of the labor market’s softening trend. This trend, he noted, is in line with moderate growth in economic activity.

He added that the Federal Reserve may have to ‘front-load’ cuts, a comment that suggests the Fed could cut rates by 50 basis points at the upcoming meeting in September.

Despite the cooling of the labor market, Waller does not see the economy as being in a recession or on the verge of entering one imminently.

Waller’s remarks come at a time when the Federal Reserve is closely monitoring economic indicators to gauge the appropriate monetary policy.

Waller’s “tone was quite dovish, just as it was with Powell at Jackson Hole, and the Fed has clearly pivoted in response to the cooling in employment and inflation. While Waller doesn’t commit to 25bp or 50bp on 9/18, the latter outcome seems very likely,” Vital Knowledge analysts said. 

“Importantly, Waller doesn’t think the economy is in or imminently headed for a recession, although markets are increasingly concerned about this possibility.”

Citi economists also said today that they expect the Fed to cut by 50 bps in September.

Investing.com — Apple (NASDAQ:AAPL)’s new iPhone is set to share the spotlight with Apple Intelligence at the tech giant’s ‘Glowtime’ product launch event next week, with many optimistic that the new AI software could provide a catalyst for upgrades, but there’s still reason to remain cautious amid regulatory and geopolitical headwinds.

“We believe smartphones supportive of new gen AI capabilities may provide the extra nudge necessary for consumers to justify an upgrade earlier than planned, even in a downbeat economic environment like this one,” analysts at Monness, Crespi, Hardt & Co., Inc. said in a note to clients on Friday, ahead of the iPhone maker’s event on Sept. 9.

As the iPhone 16 family isn’t expected to feature significant hardware changes, the integration of Apple Intelligence could could reignite users of older iPhone models to upgrade, sparking a new iPhone upgrade cycle. 

Apple Intelligence is expected to be compatible with all four models of the iPhone 16 family, paving the way for upgrades across the enter iPhone range, but the roll out of Apple’s new AI tech may not be immediate.

“Apple Intelligence is expected to arrive with a lag relative to the launch of the iPhone 16 family and the availability of its various features staggered,” the analysts noted. They added that the initial release will only be available in U.S. English, with support for other languages planned over the next year.

Despite the clamour for an AI-enhanced iPhone, the analysts remain cautious on Apple stock, citing regulatory headwinds, geopolitical risks, and economic challenges.

Still, Apple’s foray into gen AI will be closely watched to see how the tech product trendsetter  plans to maintain its “competitive edge in an increasingly saturated smartphone market,” they added.

Investing.com — The S&P 500 fell sharply Friday, suffering its worst week since 2023 amid fresh economic worries after data showing the U.S. economy created fewer than expected jobs last month. 

By 4:00 p.m. ET (20:00 GMT), the S&P 500 fell 1.7%, taking weekly losses to more than 3% as it notched its worst week since March. The tech-heavy Nasdaq Composite slumped 2.5% and the 30-stock Dow Jones Industrial Average fell 401 points or 1%. 

Nonfarm payrolls come in below estimates

The US economy added fewer jobs than anticipated in August, but rose from a sharply revised July figure, according to Labor Department data that could factor into the Federal Reserve’s next policy decisions.

Nonfarm payrolls came in at 142,000 last month, up from a heavily downwardly-revised mark of 89,000 in July. Economists had called for a reading of 164,000, up from the initial July mark of 114,000.

Friday’s release also showed the US unemployment rate at 4.2%, compared to July’s figure of 4.3%. The level was in line with estimates.

On a monthly basis, average hourly earnings growth also ticked up to 0.4% after contracting by 0.1% in July.

“This softness in the labor market is enough to give the Fed cover to ease up on monetary policy, but we do not currently see signs of recession that would necessitate a significant number of cuts,” Jefferies said in a note, reiterating its call for the Fed to cut rates by 25 basis point later this month.

Meanwhile, the rate-sensitive 2-year Treasury yield sold off and its 10-year counterpart retraced earlier losses. That contributed to a steepening of the yield curve, which is once again positive. Yields typically move inversely to prices.

Fed’s Waller calls for rate cuts to begin

Fed Governor Christopher Waller on Friday called for the U.S. central bank to begging cutting rate later this month, adding that the incoming economic data will determine the size and pace of rate cuts.

“If the data suggests the need for larger cuts, then I will support that as well. I was a big advocate of front-loading rate hikes when inflation accelerated in 2022, and I will be an advocate of front-loading rate cuts if that is appropriate.”

The dovish remarks, however, come at a time when the market is already pricing an aggressive rate cutting cycle from the Fed to cushion the economy against a possible slowdown. 

“Waller delivers dovish remarks, but markets are already assuming fairly aggressive cutting, and are now worried about growth,” Vital Knowledge said in a Friday note, forecasting that a larger 50bps cut for September was now “very likely.”   

Broadcom sales outlook underwhelms, UiPath turns lower despite beat and raise quarter

Shares in Broadcom (NASDAQ:AVGO) slumped by more than 10% in early US trading after the group’s current-quarter sales guidance slightly disappointed investors’ expectations. By 10:52 ET (14:52 GMT), shares had dropped 10%.

The firm projected that it would deliver $14 billion in revenue in its fourth quarter, just under estimates of $14.04 billion, according to LSEG data cited by Reuters. The forecast was seen as a sign of possible sluggishness in the company’s non-AI-related operations.

The AI segments, however, remained strong, Broadcom said. The firm once again raised its outlook for full-year sales of AI parts and custom chips to $12 billion, up from its prior forecast of more than $11 billion during the period.

Other chip stocks, including artificial intelligence-darling Nvidia (NASDAQ:NVDA) and peer Advanced Micro Devices (NASDAQ:AMD), declined following Broadcom’s report. Marvell Technology (NASDAQ:MRVL) and Micron Technology (NASDAQ:MU) were also lower ahead of the opening bell.

UiPath Inc (NYSE:PATH) fell 6% despite raising its annual guidance and reporting Q2 results that beat Wall Street estimates. 

Some on Wall Street believe the stock will remain range bound as further signs stable execution is required for investors to turn bullish on the company. 

“We continue to believe PATH is likely to remain range-bound over the medium term and await more signs of stable execution,” RBC said in a note.

Scott Kanowsky and Reuters contributed to this report.