Key Highlights Nasdaq surged 5% during the trading week, while the S&P 500 climbed nearly 3.5% July saw a reduction of 23,000 jobs, significantly missing forecasts of 80,000 new positions The
Wall Street concluded Friday’s session on a positive note, marking the strongest weekly performance since April, as disappointing employment figures reduced concerns about additional Federal Reserve interest rate increases.
The Dow Jones Industrial Average advanced 151 points, representing a 0.3% increase. The S&P 500 climbed 0.6%, while the Nasdaq registered a 1.3% gain during Friday’s trading.
E-Mini S&P 500 Sep 26 (ES=F)The weekly performance painted an even more impressive picture. The tech-heavy Nasdaq soared 5%, and the S&P 500 advanced nearly 3.5%. Each of the three primary benchmarks recorded positive weekly results.
Friday morning’s Labor Department employment report served as the primary driver behind the rally. July saw the US economy shed 23,000 nonfarm payroll positions. Market analysts had anticipated an increase of 80,000 jobs.
BREAKING: The US economy unexpectedly loses -23,000 jobs in July, well below expectations of +85,000.
The unemployment rate fell to 4.1%, below expectations of 4.2%.
June's jobs number was also revised down by -37,000 jobs.
This marks the 3rd biggest monthly job loss since the…
— The Kobeissi Letter (@KobeissiLetter) August 7, 2026
While the unemployment rate decreased slightly from 4.2% to 4.1%, this modest improvement failed to alter the broader narrative of weakening employment conditions.
Fixed-income markets demonstrated an immediate response to the employment figures. The 2-year Treasury note’s yield declined 4.2% over the week, marking its steepest weekly decline since June. The benchmark 10-year yield dropped beneath 4.66%.
Since bond valuations move inversely to yields, declining yields signaled a rally in the Treasury market. Equities subsequently tracked this upward momentum.
Rosenberg Research’s David Rosenberg characterized the data as favorable for bonds and stated he could identify no justification for the Federal Reserve to raise rates in September or in subsequent months.
The CME FedWatch Tool showed the probability of a September rate increase fell to 42%, down from 55% prior to the report’s release. Market participants now assign a 24.8% probability to rates remaining unchanged through year-end, up from 15.5% just one day earlier.
Having digested the employment report, market participants are redirecting their attention toward upcoming inflation metrics. The July Consumer Price Index arrives on August 12, with the Producer Price Index following on August 13.
Talaria Capital Management’s Christopher Shaffer noted that the jobs data places all attention squarely on the upcoming CPI release.
While corporate earnings season approaches its conclusion, quarterly results from Super Micro Computer, Applied Materials, and Cisco Systems remain on investors’ radars and will draw considerable attention.
In energy markets, crude prices declined Friday amid ongoing uncertainty surrounding US-Iran relations. Diplomatic efforts between Iran and Oman continue regarding the potential reopening of the Strait of Hormuz, with reports suggesting Iran seeks to restrict passage for US and Israeli vessels.
Markets face their next significant catalyst on Wednesday, August 12, when inflation data is released.
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