US equities ended the week on a mixed note Friday, with the Dow Jones Industrial Average edging lower while the Nasdaq Composite rallied, after a softer-than-expected July jobs report dampened expectations for a Federal Reserve rate hike in September.
The Dow slipped about 0.11%, or roughly 60 points, while the S&P 500 gained 0.37%. The tech-heavy Nasdaq led the advance, climbing more than 1.06%, buoyed by strong earnings from software and semiconductor companies.
The moves came after a downbeat Thursday session, when rising oil prices and mixed corporate results weighed on sentiment. However, the major indexes were still on track for solid weekly gains, with the S&P 500 and Dow poised for their best week since April and the Nasdaq its strongest since May, rebounding from a recent pullback.
Weak payrolls reshape Fed expectations
The Labor Department reported that the US economy unexpectedly lost 23,000 jobs in July, versus economists' forecasts for growth of about 80,000. The unemployment rate ticked down to 4.1% from 4.2% in June, while average hourly earnings rose 3.2% year-over-year, below the expected 3.5%.
The disappointing jobs data prompted traders to sharply reduce the odds of a September rate increase. Money market pricing showed the probability of a hike falling to around 20%, down from roughly 55% before the report. Futures markets increasingly reflected expectations that the Fed would hold its benchmark rate steady at its next meeting.
These figures arrive as investors closely monitor economic data under Fed Chair Kevin Warsh, whose limited forward guidance has made incoming indicators more critical for monetary policy expectations.
AI-linked tech stocks lead market gains
Technology shares outperformed following a fresh wave of earnings. Atlassian surged more than 36% after forecasting quarterly revenue above Wall Street estimates. Microchip Technology jumped over 11% on stronger-than-expected revenue guidance, lifting the broader semiconductor sector. Micron Technology slipped 0.2%, while Marvell Technology advanced 3.44%.
Software names also traded higher, with ServiceNow up 5.3%. Cloudflare climbed more than 11% after raising its full-year revenue forecast above analyst expectations, highlighting sustained demand tied to artificial intelligence infrastructure. Airbnb gained around 14% after reporting second-quarter revenue that beat estimates.
Not all reactions were positive. Trade Desk tumbled nearly 25% after forecasting third-quarter revenue below Wall Street projections.
Trade measures and Middle East remain in focus
The White House announced new measures to support domestic production, imposing price floors and a 15% tariff on products made from polysilicon, a key material in semiconductors and solar panels primarily produced in China. The move boosted solar stocks, with First Solar rising about 9% and SolarEdge gaining more than 5%.
Geopolitical tensions also drew attention after reports that Iran was reviewing legislation that could restrict US, Israeli, and other vessels deemed hostile from transiting the Strait of Hormuz, with substantial penalties for violations. Separately, Iran-backed Houthi forces launched attacks on Saudi Arabia, keeping investors alert to potential disruptions in global energy markets.
Oil prices eased modestly Friday after surging the previous session, with Brent crude slipping below $82 per barrel and US West Texas Intermediate trading below $77 per barrel as markets assessed the evolving situation. For more on energy market dynamics, see Brent's slide on Hormuz hopes.
Investors will likely continue to weigh the implications of the jobs report and geopolitical developments in the coming sessions. For broader market context, check out recent AI-driven rallies and June's job openings data.
This article is for informational purposes only and does not constitute financial advice.
