Written by Amaury de Barros Conti, Partner | Vice President Investments
WHAT MOVED MARKET LAST WEEK
Markets navigated a relatively quiet week, with investors balancing encouraging labor market data against renewed inflation concerns stemming from higher energy prices and rising bond yields. While headline index performance was largely flat, in our view the underlying message from the market remains clear: economic growth appears resilient, but the path of interest rates will likely determine whether equities can extend their advance into year-end. As the Federal Reserve approaches its September meeting, investors are increasingly focused on inflation and bond market dynamics rather than recession risk.
The S&P 500 finished essentially unchanged, rising 0.1%, while the Nasdaq Composite gained 0.4%. The Dow Jones Industrial Average declined 0.3%, and the Russell 2000 posted a modest gain, as per Bloomberg data. Growth stocks outperformed value by the widest margin in a month, while energy stocks led sector returns as oil prices moved higher on escalating tensions between the United States and Iran near the Strait of Hormuz.
- The most significant development of the week was the August employment report, which came in much stronger than expected. U.S. employers added 162,000 jobs during the month, nearly three times consensus expectations of approximately 55,000. In addition, June and July payrolls were revised upward by a combined 55,000 jobs, reversing concerns that the labor market was deteriorating rapidly. The unemployment rate remained at 4.1%, while labor force participation improved to 61.6%.
- Beneath the headline strength, however, the labor picture remains mixed. ADP private payrolls increased just 38,000, the weakest reading since January, and job openings remained below expectations. Wage growth also continues to moderate, suggesting inflationary pressures from the labor market are gradually easing. Taken together, the data support the view that employment conditions are stabilizing rather than reaccelerating.
- While equities largely moved sideways, fixed-income markets continued to command investor attention. The 10-year Treasury yield approached 4.8% during the week as higher oil prices and persistent inflation concerns pressured long-term rates. Yields retreated briefly after comments from Federal Reserve Governor Christopher Waller suggesting patience on rate hikes, only to move higher again following the stronger-than-expected employment report.
- We believe this dynamic reinforces a theme that has emerged throughout the summer: the primary risk to equities is not economic weakness, but rather the potential for higher long-term interest rates. Treasury markets continue to be influenced by several structural factors, including elevated fiscal deficits, substantial Treasury issuance, ongoing AI-related capital investment, and inflation that remains above central bank targets.
LOOKING AHEAD
- The upcoming week could be pivotal for markets. The August CPI report is the final major inflation release before the September 15-16 Federal Reserve meeting and will likely have an outsized influence on policy expectations. Investors will also monitor PPI, jobless claims, consumer sentiment, and housing data for additional insight into inflation and growth trends.
- On the corporate side, reports from Oracle and Adobe, along with commentary from Nvidia at the Goldman Sachs Communacopia and Technology Conference, should provide further insight into AI spending trends and enterprise technology demand.
Amaury de Barros Conti
Partner | Vice President Investments
Source: Bloomberg Finance (index and sector returns, rates, and commodities); T. Rowe Price, RBC Global Asset Management, Goldman Sachs Research, Bloomberg Economics, Seeking Alpha, CNBC, Reuters, Bureau of Labor Statistics (payrolls, unemployment rate, labor force participation), ISM, ADP (private payroll figures), Federal Reserve (Governor Waller remarks, September 3, 2026), CME Group FedWatch (policy odds). Data as of September 4, 2026.
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