NEW YORK, August 7, 2026, 12:06 p.m. ET
- Markets are open for regular trade. At 11:50 a.m. ET, the Nasdaq was up 1.33%, while the S&P 500 increased 0.64% and the Dow advanced 0.22%.
- Initial data for July showed payrolls dropped by 23,000, compared to forecasts for an increase of 80,000. The unemployment rate declined to 4.1%.
- The probability of a rate increase in September dropped to around 20%, down from 55% prior to the report.
U.S. equities climbed on Friday, as an unexpected fall in payrolls reduced short-term rate concerns. The more telling indicator was the gap in performance: the Nasdaq led the Dow by 1.11 percentage points. This points to a duration trade rather than a widespread growth recovery.
The gap was evident on the tape by late morning.
| Index | 11:36 ET level | 11:36 move | 11:50 move |
|---|---|---|---|
| Dow Jones Industrial Average (INDEXDJX:.DJI) | 53,976.97 | up 0.17% | up 0.22% |
| S&P 500 (INDEXSP:.INX) | 7,757.98 | rising 0.62% | rising 0.64% |
| Nasdaq Composite (INDEXNASDAQ:.IXIC) | 26,691.82 | advancing 1.30% | advancing 1.33% |
| Nasdaq minus Dow | — | +1.13 percentage points | +1.11 percentage points |
Market updates provided by Reuters as of 11:36 a.m. ET and by WSJ/FactSet at 11:50 a.m. ET.
The Dow remained higher but trailed gains in semiconductors and software stocks. Declining Treasury yields supported long-duration growth equities.
The July employment data served as the catalyst. Payrolls decreased by 23,000, falling short of the Reuters consensus by 103,000 jobs. Previous figures for May and June were also revised downward significantly.
| Labor measure | July/latest | Comparator | Difference |
|---|---|---|---|
| Nonfarm payrolls, preliminary | -23,000 | +80,000 consensus | -103,000 |
| Unemployment rate | 4.1% | 4.2% in June | -0.1 pp |
| Participation rate | 61.4% | 61.5% in June | -0.1 pp |
| May-June payroll revisions | -103,000 | Previously published totals | -103,000 |
July data are subject to revision. Payroll expectations were taken from a Reuters survey.
The report disappointed, yet did not fully signal a recession. Unemployment edged down and private sector jobs increased by 30,000. However, the participation rate declined to 61.4%, softening the progress in unemployment.
Rates markets reacted swiftly, with the probability of a September hike dropping to roughly 20% from 55% prior to the data. The yield on the two-year Treasury slipped seven basis points to 4.176%, while the 10-year Treasury yield decreased five basis points to 4.61%.
Edward Jones senior analyst Brian Therien noted that the Federal Reserve faced “somewhat less urgency.” He stated that the timing would rely on forthcoming inflation and jobs figures. Reuters
Eight out of 11 S&P sectors closed higher. Consumer discretionary stocks were the top performers, whereas energy shares declined. The Philadelphia semiconductor index climbed 2.3%, while software services increased by 1.5%.
| Company | Intraday move | Catalyst | Guidance versus expectations |
|---|---|---|---|
| Atlassian NASDAQ:TEAM | +30.2% | Quarterly results exceed estimates; guidance raised | Q1 revenue projected at $1.71–$1.72 billion, compared with $1.66 billion |
| Microchip Technology NASDAQ:MCHP | +13.8% | Widespread chip demand boosts shares | Q2 revenue seen at $1.59–$1.62 billion versus $1.55 billion |
| Airbnb NASDAQ:ABNB | +15.4% | Revenue for the second quarter surpasses estimates | Beats market projections |
| Cloudflare NYSE:NET | +7.3% | Higher demand linked to AI, outlook lifted | Full-year revenue expected at $2.86–$2.87 billion against $2.81 billion |
| Nvidia NASDAQ:NVDA | +2.6% | Chip stocks rally broadly | Semiconductor index up 2.3% |
| Trade Desk NASDAQ:TTD | -21.7% | Poor Q3 outlook pressures stock | Revenue guidance trails market consensus |
Reuters moves as of 11:36 a.m. ET. Analyst estimates cited for guidance comparisons are sourced from Reuters.
The earnings buffer remains notably strong. Over 85% of the more than 400 S&P companies reporting have surpassed projections. The average beat rate since 1994 is 68%. This 17 percentage-point difference sheds light on the rally triggered by weaker jobs figures.
Analyst moves reflected similar pickiness. JPMorgan Chase NYSE:JPM raised its price target for Cloudflare to $350 from $145, more than twice its previous level. Trade Desk was downgraded by several analysts after it missed guidance.
| Company | Analyst firm | Recommendation | Price target |
|---|---|---|---|
| Trade Desk NASDAQ:TTD | Needham | Buy reiterated | $19 lowered from $25 |
| Trade Desk | Cantor Fitzgerald | Neutral reiterated | $14 reduced from $20 |
| Trade Desk | Susquehanna | Neutral downgraded from Positive | $14 cut from $34 |
| Trade Desk | Guggenheim | Neutral shifted from Buy | $12 dropped from $25 |
| Trade Desk | Baird | Neutral lowered from Outperform | $9 down from $27 |
These are single analyst post-earnings calls disclosed on Friday, not collective analyst ratings.
The contrast is clear. Investors pushed up shares tied to strong AI infrastructure results, while companies with lagging ad tech faced declines. The software sector saw mixed reactions.
All three key indexes were on track for their top weekly performance since April. The S&P posted a 5.75% gain over four sessions through Tuesday, the best streak since April 2025. Still, the semiconductor index is down over 17% from its late-June high.
Upcoming inflation figures will put the trade to the test next week. Analysts forecast July CPI at 3.4%, with core CPI seen at 2.5%. Producer price data arrives on Thursday, followed by retail sales on Friday. Applied Materials NASDAQ:AMAT, Cisco Systems NASDAQ:CSCO, and CoreWeave NASDAQ:CRWV are among companies set to report earnings.
Risks: An above-forecast CPI, a further rise in oil prices, or fresh tensions in the Middle East could revive expectations for rate hikes. Higher yields would impact long-duration stocks before others.
Related articles: Stock Market
