Stocks traded lower Friday as more signs of labor market weakness weighed on economic outlooks. Investors were encouraged, however, that August's disappointing jobs report could spur the Federal Reserve to issue its first interest rate cut in nearly a year.

The Dow Jones Industrial Average (DIA  ) sank over 220 points lower on Friday to settle at 45,0400.86, while the S&P 500 Index (SPY  ) declined 0.3% to close at 6,481.50 and the Nasdaq Composite (QQQ  ) fell below the flatline to end the session at 21,700.38.

Driving markets, non-farm private payrolls came in at a less-than-expected 22,000 for the month of August, the Bureau of Labor Statistics (BLS) reported Friday, totaling well below the 75,000 additions expected from economists polled by Dow Jones. The unemployment rate also ticked higher to 4.3% from 4.2% in the previous month, which was in-line with estimates.

The report also upwardly revised July's print by 6,000 to 79,000, while June was downwardly revised by 27,000 to total a net loss of 13,000. June's revision was also the first labor market shrinkage reported since 2020.

"A weaker-than-expected jobs report all but seals a 25-basis-point rate cut later this month," wrote Olu Sonola, head of U.S. economic research at Fitch Ratings, in an email to YahooFinance on Friday. "Near term, the Fed is likely to prioritize labor market stability over its inflation mandate, even as inflation drifts further from the 2% target."

Data from the CME Group showed over 90% of market participants anticipate that the central bank will issue a 25-basis-point cut to its benchmark overnight borrowing rate at its upcoming September 16-17 meeting, while the other nearly 10% see policymaker's slashing the range by a half point. The current target range is 4.25% to 4.50%, which the Fed has held since December.

The new jobs report was also the first since President Donald Trump fired former BLS Commissioner Erika McEntarfer after the release of July's employment numbers -- which included dramatic reductions to private sector additions for the months of May and June.

The latest series of economic reports, including the Job Openings and Labor Market Turnover Survey (JOLTS), have signaled a softening labor market in response to uncertainty over the macroeconomic impacts of Trump's tariffs on major trading partners.

On the earnings front, Broadcom (AVGO  ) shares rose Friday after the semiconductor maker posted strong fiscal third-quarter earnings and provided rosy forward guidance. Investors were also excited by the company's $10 billion in custom chip orders from a new client announced alongside the results. For its fourth quarter, Broadcom expects revenue of $17.4 billion, topping analyst estimates.

"One of these prospects released production orders to Broadcom, and we have accordingly characterized them as a qualified customer for XPUs," CEO Hock Tan told analysts during the company's earnings call, referring to Broadcom's custom AI chips. Tan added that the outsized order was one of the catalysts behind the company's higher AI revenue forecast, expecting its to reach $6.2 billion this quarter.

Lululemon (LULU  ) shares sank on Friday after the athletic apparel retailer issued lackluster full-year guidance due to profit impacts from Trump's tariffs -- estimating the removal of the de minimis tariff exemption will cost the company $240 million in full-year profits. The company expects full-year earnings between $12.77 to $12.97 per share on revenue in the range of $10.85 billion to $11 billion, falling below Wall Street expectations of $11.18 billion.

"We are facing yet another shift today within the industry related to tariffs and the cost of doing business," CEO Calvin McDonald told analysts during the company's earnings call. "The increased rates and removal of the de minimis provisions have played a large part in our guidance reduction for the year."