Hot Jobs Report Hurts Stocks, Lifts Rate Hike Odds

Published as of: September 4, 2026, 9:17 a.m. ET

(Editor's note: U.S. markets are closed Monday, September 7, in observance of the U.S. Labor Day holiday. The Schwab Market Update will return on Tuesday, September 8.)

(Friday market open) U.S. jobs growth surged to 162,000 in August and unemployment was steady at 4.1%, the government said Friday in its nonfarm payrolls report. In addition, it upwardly revised what had been a negative July reading to positive territory. Analysts had expected growth of 45,000 to 55,000. Stocks were flat to lower right after the report and Treasury yields jumped as rate hike odds reversed the descent from earlier this week and reached 63% for September, according to Bloomberg.

"July's job losses were revised away, and we've now seen six straight months of payroll gains," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). "With all eyes on the potential 'hold versus hike' discussion at the next FOMC meeting, in a vacuum this could lend support for the 'hike' camp, but inflation matters more right now."

Major indexes rose more than 1% across the board Thursday, with the S&P 500 Index (SPX) approaching all-time highs after dovish words from Federal Reserve Gov. Christopher Waller helped ease rate worries. Still, today's jobs data and next week's Consumer Price Index (CPI) and Producer Price Index (PPI) reports, which Martin noted officials may pay more attention to than the jobs report, could help shape the Fed's mid-month decision.

1. Payrolls deeper dive: Today's jobs data might give investors sore necks, moving so quickly from July's initial negative numbers to positive in August, which represented the heaviest monthly growth since March. July initially showed 23,000 jobs lost, but that got revised up by 44,000 to a gain of 21,000, while June saw 11,000 jobs added. In sum, that's 55,000 new jobs not on the books going into today while the August headline reading was about triple the average estimate. Hourly earnings jumped 0.3%, and are up 3.1% over the last year, which is short of the 3.3% pace of Personal Consumption Expenditures (PCE) prices, the Fed's favored inflation report. Jobs growth soared in the leisure and hospitality sector last month, where food and drinking places added 59,000 positions, the government said. That reversed weakness in that sector earlier this summer. Manufacturing jobs also climbed, as did local government education, which may have been seasonal. Though next week's inflation data looms, the rate implications of today's data can't be ignored. "This just raises the risk of a hike this year," Martin said. "Warsh's speech was hawkish but he kept the optionality there. But this was stronger than expected and moves the needle closer to a hike."
    
2. Week ahead bond market preview: It's too early to know yet if the Treasury Department's announcement of larger liquidity buybacks will have an impact on yields. The buybacks begin next week, a week that also features several major U.S. Treasury auctions that could influence yields, as well as U.S. August inflation readings. "We should know next week how much above $4 billion the operations are, as Secretary Bessent suggests it's the floor, and operations could be larger," my colleague Martin said. "Higher yields are not something that necessarily need to be fixed. The economy is growing and the fed funds rate is near neutral (or below), so a positively sloped yield curve makes sense." The Fed's recent shift from a cutting bias to a hiking bias explains much of the recent yield rally. Next week, The European Central Bank (ECB) meets with a rate hike expected. A Bank of Japan hike is expected the week after next as central bankers respond to relentless inflation driven partly by oil prices. Prices paid in the U.S. services industry hit a new four-year high in August, according to Thursday's ISM Services PMI^®.
    
3. Technical bounce and sentiment underpin SPX: Technically, there may have been a sense of relief that recent selling didn't send the S&P 500 Index below long-term support near 7,620 or beneath that at the 50-day moving average. But not all is well in chart-land. The tech-heavy Nasdaq-100^® (NDX), however, has traded above and below its 50-day moving average this week, hesitating to pull away from that important chart line. And the PHLX Semiconductor Index (SOX) hasn't spent much time above the 50-day since June. At this point, the SPX appears somewhat rangebound between 7,600 and 7,800 and may not have much traction either way this coming week, with earnings sparse and participants awaiting inflation data followed by the mid-month Fed meeting. Overall, sentiment seems to be improving, judging from the latest American Association of Individual Investors report for the week ending September 2. It showed bullish sentiment climbing to 39.7% from 32.9% the prior week. Bearish sentiment fell to 37.6% from 44.4%.

• Lululemon (LULU) dove 20% early after sharing disappointing results late Thursday. Earnings per share beat estimates, but the company missed analysts' revenue consensus and guidance was lowered and missed consensus.
   
• Tesla (TSLA) fell 3% this morning after a 5.4% surge yesterday that occurred as investors anticipated yesterday's Cybercab event. The stock fell after Tesla revealed the driverless car and the event didn't feature CEO Elon Musk.
   
• Samsara (IOT) climbed 13% after impressive earnings for the fleet management software company, which credited rising customer adoption of AI features.
   
• Adobe (ADBE) slid 3.2% after the company named Anil Chakravarthy its next CEO. He replaces Shantanu Narayen, who announced his departure last March.
   
• Bitcoin fell almost 3% after the jobs report as rate hike odds rose. Shares of crypto-related stocks dove 5%.
   
• Gold fell 2% after the jobs report, hurt by ideas that the Fed might raise rates.
   
• Crude oil (/CL) is up for the week and remains above $90 for WTI after the recent fresh round of skirmishes between Iran and the U.S. The week hasn't brought any progress toward a resolution, and ship transits through the Strait, which had made some gains earlier this week, fell on Thursday.
   
• Snowflake (SNOW) surged nearly 17% Thursday after its quarter beat analysts' expectations and the cloud firm's guidance impressed. Snowflake projected fiscal third quarter revenue growth at 37% to 38% annually. Analysts saw the report as evidence that AI-driven acceleration continues.
   
• Other software stocks rode on Snowflake's coattails yesterday. Big gainers included Palantir (PLTR) up nearly 8%, ServiceNow (NOW), up almost 7%, and CrowdStrike (CRWD), up almost 6%.
   
• SpaceX (SPCX) climbed 7% Thursday, helped by recent strength in the AI space that potentially could lift demand for its infrastructure. It's up about 40% since the start of August after a choppy start following its initial public offering earlier this summer.
   
• Crypto-related stocks Circle Internet Group (CRCL) and Strategy (MSTR) climbed double digits Thursday, lifted by bitcoin's rise to nearly four-month highs. Technically, bitcoin punched through its 200-day moving average two weeks ago, lending strength.
   
• Meta Platforms (META) climbed 3% Thursday, a move CNBC attributed to the rollout of Meta's AI model Muse Spark 1.3.
   
• Tyson Foods (TSN) plunged more than 7% after cutting its outlook amid pressure from the cattle shortage, Reuters reported.

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It's a tale of two halves for software as names like Snowflake (SNOW—candlesticks), Palantir (PLTR—blue line), and Salesforce (CRM—purple line) rebounded since July from sharp losses in early 2026. This came as the PHLX Semiconductor Index (SOX—orange line) remains far higher for the year but down quite a bit from its June peak.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

September 7: U.S. markets closed for Labor Day holiday.
September 8: Expected earnings from Casey's General Stores (CASY).
September 9: Expected earnings from Chewy (CHWY).
September 10: ECB rate decision, August PPI, August core PPI, August existing home sales, and expected earnings from Oracle (ORCL), Macy's (M), and Adobe (ADBE).
September 11: August CPI and core CPI and expected earnings from Kroger (KR).