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Soft July Jobs Report Sends Bonds Lower and Stocks to Record High

A surprise payroll loss lowered market bets on a September Fed rate hike, putting upcoming inflation readings at the center of investor focus.

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Global business stock market rising chart and financial data numbers.
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Overview

  • The U.S. Labor Department reported a loss of 23,000 nonfarm payroll jobs in July, and revisions trimmed about 103,000 jobs from May and June.
  • Bond yields fell after the report, the CME FedWatch probability of a September rate hike dropped sharply, and the S&P 500 closed at an all-time high on Friday.
  • Mixed earnings left the rally narrow as software names such as Datadog and AppLovin plunged on weak guidance and memory-chip firms retreated after SanDisk's outlook disappointed.
  • Renewed Middle East tensions, including a Houthi attack on a Saudi tanker and Iran‑Oman talks over the Strait of Hormuz, lifted oil prices and kept inflation risk elevated.
  • Investors are now focused on next week's July CPI (Aug. 12) and PPI (Aug. 13) reports because those readings will be the main data driving Fed expectations and market positioning.