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August 7, 2026 - 22:06
5 minutes
(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 sent the S&P 500 to a record high at the end of its best week since April. The gauge also rose as Reuters reported the US will lift its blockade on Iranian ports once a Strait of Hormuz deal to restore shipping is reached. Oil eased in late hours.Short-dated Treasuries outperformed. Money markets still project a Fed hike in 2026, but not before December. The dollar retreated.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 the 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.“This was very consistent with how I’ve been seeing the labor market, which is it’s not loose, it’s not tight, it’s sort of in a weak balance,” Fed Bank of Richmond President Tom Barkin said on a webinar hosted by the National Association for Business Economics. He’s not seeing wage inflation right now.One weak jobs report isn’t likely to dictate Fed policy, and the central bank will probably maintain its wait-and-see approach on rates, and allow more time to pass to examine economic data, 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.Friday’s report buys some breathing room, but only temporarily, noted Seema Shah at Principal Asset Management. With policymakers offering little in the way of forward guidance, next week’s inflation figures loom even larger and could quickly put hike fears back on the table, she added.“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,” said Ellen Zentner at Morgan Stanley Wealth Management.Corporate Highlights:SpaceX was upgraded to buy at Argus Research, which said it is encouraged by the “rapid payback” on the firm’s AI infrastructure investments. Airbnb Inc. boosted its annual revenue forecast for a second time this year, citing robust demand in the US and Europe. Sweetgreen Inc. cut its annual outlook after warning that diners are less willing to eat fresh prepared foods during the cyclospora outbreak. Under Armour Inc. forecast a sharper revenue decline than previously expected as demand softens in several key regions. OpenAI is pausing some internal work around one of its upcoming artificial-intelligence models to implement stricter safeguards after the system was found to be significantly more adept at cybersecurity tasks. 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:StocksThe S&P 500 rose 0.6% as of 4 p.m. New York time The Nasdaq 100 rose 1.2% The Dow Jones Industrial Average rose 0.3% The MSCI World Index rose 0.7% CurrenciesThe Bloomberg Dollar Spot Index fell 0.4% The euro rose 0.3% to $1.1561 The British pound rose 0.3% to $1.3498 The Japanese yen rose 0.5% to 157.58 per dollar CryptocurrenciesBitcoin rose 0.8% to $64,916.35 Ether rose 0.6% to $1,917.59 BondsThe yield on 10-year Treasuries declined four basis points to 4.64% Germany’s 10-year yield was little changed at 3.13% Britain’s 10-year yield declined two basis points to 4.92% The yield on 2-year Treasuries declined five basis points to 4.19% The yield on 30-year Treasuries declined three basis points to 5.19% CommoditiesWest Texas Intermediate crude fell 0.3% to $77.06 a barrel Spot gold rose 2.4% to $4,343.07 an ounce ©2026 Bloomberg L.P.
