Written by Amaury de Barros Conti, Partner | Vice President Investments
WHAT MOVED MARKET LAST WEEK
Markets delivered their strongest weekly performance since April as investors responded to a softer-than-expected employment report and growing confidence that the Federal Reserve may remain on hold through its September meeting. While geopolitical tensions in the Middle East and inflation concerns remained important themes, the combination of moderating labor market conditions, resilient corporate earnings, and continued strength in AI-related investment helped support risk assets. The market’s response suggests investors focused more on the prospect of stable monetary policy than on the risk of additional rate hikes.
The S&P 500 gained 3.6%, the Nasdaq Composite rose 5.2%, the Dow Jones Industrial Average added nearly 3.0%, and the Russell 2000 advanced 3.5%, as per Bloomberg data.
Source: Bloomberg Finance as of August 7, 2026.
- Second-quarter earnings continued to exceed expectations, particularly among companies linked to artificial intelligence, data centers, cloud infrastructure, and digital transformation.
- Several high-profile companies delivered notable results. SpaceX, reporting its first quarterly results as a public company, generated revenue of approximately $7.8 billion, representing growth of more than 90% year-over-year.
- Importantly, earnings strength appeared to extend beyond technology in some areas. Industrial companies such as Caterpillar reported record sales and earnings, suggesting capital spending and infrastructure investment remained supportive across a broader set of sectors.
- The most consequential economic release of the week was Friday’s employment report. Nonfarm payrolls declined by 23,000 jobs in July, well short of expectations for an increase of approximately 80,000 jobs. This marked the first monthly decline in payroll growth in several months and was accompanied by downward revisions to prior months totaling more than 100,000 jobs.
- The unemployment rate edged down to 4.1% from 4.2%, although much of the improvement reflected a decline in labor force participation. Wage growth moderated to 3.2% year-over-year, the slowest pace since 2021, supporting the view that labor-related inflation pressures continue to ease. Other economic data painted a more balanced picture.
- From a Federal Reserve perspective, the employment report may have altered the near-term policy outlook. Market-implied odds of a September rate hike fell materially following the data release, with investors increasingly expecting the Fed to remain patient as policymakers balance moderating growth against still-elevated inflation.
LOOKING AHEAD
- The week will be dominated by inflation data. July CPI will be released on Wednesday, followed by Producer Price Index data and retail sales later in the week. Together, these reports should help investors assess whether the moderation in labor market activity is being accompanied by continued progress on inflation.
- Investors will also monitor remaining earnings reports, including results from Cisco Systems and Applied Materials, which could provide further insight into enterprise technology spending and semiconductor demand trends.
Amaury de Barros Conti
Partner | Vice President Investments
Source: Bureau of Labor Statistics for labor and employment data; Bloomberg Finance LP as of August 7, 2026 for index return data.
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