Stocks and Bonds Rise as Jobs Ease Fed-Hike Worry: Markets Wrap
(Bloomberg) — A sharp slowdown in the US jobs market drove stocks higher while bond yields fell on speculation the Federal Reserve won’t be forced to raise interest rates any time soon.
Those bets halted a two-day drop in equities, with the S&P 500 set for its best week since April. The yield on 10-year Treasuries declined five basis points to 4.63%. The dollar fell. Money markets still project a Fed hike in 2026, but not before December. Oil wavered as traders weighed negotiations over the Strait of Hormuz.
US employers unexpectedly cut jobs in July and hiring in the prior two months was revised lower, suggesting the labor market is weaker than previously thought after surprising strength earlier this year.
Nonfarm payrolls decreased 23,000 last month following a combined 103,000 downward revision to the May and June figures. The unemployment rate fell to 4.1% as labor force participation continued to slide, and wage growth slowed.
The latest jobs report was weak enough to take some pressure off the Fed to raise interest rates, but not yet weak enough to signal that the labor market or economy is falling apart, according to Bret Kenwell at eToro.
“Inflation remains a concern, but today’s data may give policymakers more reason to remain patient — and investors more room to lean into risk,” he said.
Friday’s jobs report was not just much weaker-than-expected, it showed that the economy shed jobs during July, which puts the Federal Reserve in a conundrum, since inflation is still elevated and sticky, according to Brent Wilsey at Wilsey Asset Management.
“While incoming inflation data will be the ultimate arbiter, slowing jobs growth helps support a September hold,” said Lindsay Rosner at Goldman Sachs Asset Management.
While the weak payrolls print may ease the pressure on the Fed to raise rates at its September meeting, next week’s inflation data will still likely be the deciding factor, noted Ellen Zentner at Morgan Stanley Wealth Management.
“If those numbers come in hotter than expected, a cooler labor market may not be enough to quiet the calls for hikes inside the Fed, or lower expectations outside of it,” she added.
Corporate Highlights:
Under Armour Inc. forecast a sharper revenue decline than previously expected as demand softens in several key regions. Sweetgreen Inc. cut its annual outlook after warning that diners are less willing to eat fresh prepared foods during the cyclospora outbreak. Wendy’s Co. withdrew its 2026 outlook and cut its dividend as its new chief executive devises a recovery plan for the beleaguered brand. Airbnb Inc. boosted its annual revenue forecast for a second time this year after it saw robust global travel demand, particularly in the US and Europe. DraftKings Inc. reported second-quarter sales and earnings that missed analysts expectations as the sportsbetting industry confronts a new challenge from prediction-market players. What Bloomberg Strategists say…
“Just when the conversation had become monolithically about inflation, the jobs report Friday brought enough doubt about employment into the picture to make a September hold more likely.”
—Edward Harrison, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.4% as of 9:33 a.m. New York time The Nasdaq 100 rose 1.1% The Dow Jones Industrial Average was little changed The Stoxx Europe 600 rose 0.5% The MSCI World Index rose 0.5% Currencies
The Bloomberg Dollar Spot Index fell 0.4% The euro rose 0.4% to $1.1566 The British pound rose 0.3% to $1.3498 The Japanese yen rose 0.6% to 157.51 per dollar Cryptocurrencies
Bitcoin rose 1.3% to $65,247.35 Ether rose 1.3% to $1,930.72 Bonds
The yield on 10-year Treasuries declined five basis points to 4.63% Germany’s 10-year yield declined one basis point to 3.13% Britain’s 10-year yield declined three basis points to 4.91% Commodities
West Texas Intermediate crude fell 0.4% to $76.96 a barrel Spot gold rose 2.8% to $4,357.77 an ounce ©2026 Bloomberg L.P.
