Stock indices posted another week of gains on Friday, August 7, 2026, as market participants interpreted the unexpected reduction in July job numbers as a signal that the Federal Reserve may not need to increase interest rates soon. The S&P 500 advanced 0.62% to close at a record 7,757.64, while the Nasdaq Composite outperformed, climbing 1.3% to reach 26,690.62. The Dow Jones Industrial Average finished the week up 151.83 points, or 0.28%, at 54,036.93.
Weekly Market Performance Highlights
The major indexes achieved their best weekly performances since April. The S&P 500 saw a notable increase of 3.6% during the week, having surpassed 7,700 for the first time previously. The Nasdaq experienced a 5.2% gain, partly attributed to a rebound in chip stocks, and the Dow gained nearly 3% over the course of the week. The iShares Semiconductor ETF (SOXX) ended the week with gains exceeding 7%.
Economic Signals and Fed Outlook
The market reaction was heavily influenced by the Bureau of Labor Statistics’ July nonfarm payrolls report, which revealed a drop of 23,000 jobs. This figure significantly missed the 83,000 addition that economists surveyed by Dow Jones had anticipated. Furthermore, the unemployment rate decreased to 4.1%, contrasting with the expected unchanged rate of 4.2%. The labor force participation rate also declined, reaching 61.4% in July, down from 61.5% in June.
Despite the mixed nature of the labor data, analysts suggested that the primary concerns for the market remained inflation and commodity yields. According to Saira Malik, chief investment officer at Nuveen, “For the job market this is a number that’s not booming and may actually be breaking, but for the markets the two biggest areas of concern were yields and inflation.” She added that “This lower number helps not reinforce the Fed’s narrative that they need to raise interest rates.”
Regarding monetary policy, the CME FedWatch tool indicated that most fed funds futures traders now anticipate the central bank will keep its benchmark lending rate stable between 3.50% and 3.75% at the September meeting, a shift from the previous day when a 55% probability of a quarter-point hike was priced in.
Sector and Corporate Movements
Software companies notably drove the gains on Friday. Cloudflare shares rose more than 5% after the cloud cybersecurity firm released a strong outlook for both the full year and the current quarter. Atlassian shares jumped 35% after the company’s fourth-quarter adjusted earnings and revenue exceeded expectations and provided upbeat guidance. Airbnb shares also rallied 17% after the vacation rental company reported top-line and bottom-line results that surpassed analyst estimates.
Other notable stock movements included:
- SpaceX: The company’s stock rose 12% on Friday, with the overall week-to-date gain nearing 19%, fueled by growing investor confidence in its fundamentals.
- Nvidia: The chipmaker’s shares gained over 10% for the week, receiving a boost after SpaceX CEO Elon Musk named Nvidia as its “exclusive” partner for its AI development.
- Under Armour: The sports apparel maker dropped over 3% after lowering its revenue guidance for the year ending next March, citing softer demand, particularly in North America and the Asia-Pacific.
Commodities and Geopolitics
Oil prices saw slight increases as investors awaited a potential resolution regarding the Strait of Hormuz. West Texas Intermediate (WTI) futures for September delivery rose 1.15%, settling at $78.18 per barrel. International benchmark Brent crude climbed 1.29% to settle at $83.55.
The focus on the Strait of Hormuz was amplified by reports that Iranian negotiators are awaiting final approvals from the Supreme National Security Council for a deal with the U.S. and Oman to reopen the waterway. This follows earlier statements from Treasury Secretary Scott Bessent, who suggested a deal between the U.S. and Iran could materialize soon.
In Asia-Pacific markets, the Chinese exports growth for July rose 23.9% in U.S. dollar terms, topping the Reuters consensus forecast of 22.2%. However, mainland China and Hong Kong stocks opened mixed amid general trade uncertainty.
Gold prices are also tracking favorably, with spot gold showing gains, and the overall momentum in precious metals being boosted by the dip in oil prices and the softer hiring data.
