Stock market today: Job losses in August increase the likelihood of major interest rate cuts

• US stocks were mixed on Friday after the August employment report fell short of economists' estimates.
• The US economy added 142,000 new jobs in August, below the estimate of 164,000. The unemployment rate fell to 4.2 percent.
• “All in all, this is still consistent with an economy experiencing a soft landing,” said economist Paul Ashworth.

U.S. stocks faltered on Friday after the August employment report slightly missed economists' estimates.

The U.S. economy added 142,000 new jobs in August, below the average economist estimate of 164,000. The unemployment rate fell to 4.2% from 4.3%.

According to Capital Economics, the report reinforces the prospects for a soft landing for the US economy.

“Overall, this is still consistent with an economy experiencing a soft landing rather than plunging into recession,” said Paul Ashworth, economist at Capital Economics, in a note following Friday's jobs report.

The probability of a significant interest rate cut at the US Federal Reserve's FOMC meeting on September 18 rose sharply after the release of the labor market report.

According to the CME FedWatch tool, markets are at 51 percent if the Fed cuts interest rates by 50 basis points later this month. On Thursday, the probability was still at 40 percent.

But Ashworth does not expect this to happen. Instead, he believes a rate cut of 25 basis points is more likely.

“We expect the Fed to start with a 25 basis point cut, but we must acknowledge that the decision is close,” Ashworth said.

The August employment report may ultimately have a positive impact on the stock market, according to Chris Zaccarelli, CIO of the Independent Advisor Alliance.

“While the bears have a lot to do in the form of a weakening job market and a slowing economy, the facts still point to an economy that is growing, not one that is headed for an imminent recession. For this reason, we believe that once the election is behind us, we will see this bull market pick up again and climb to new all-time highs before the next bear market begins,” Zaccarelli said in an email to Business Insider.

Here you can see the situation of the US indices shortly after trading began at 9:30 a.m. on Friday:

Here's what else is going on:

For commodities, bonds and cryptocurrencies:

• West Texas Intermediate crude rose 0.64% to $69.59 a barrel. Brent crude, the international benchmark, rose 0.56% to $73.10 a barrel.
• The price of gold fell 0.12% to USD 2,540.00 per ounce.
• The yield on 10-year government bonds remained unchanged at 3.732%.
• Bitcoin rose 1.17% to $56,824.