Pre-Market Update: US Stocks Rise After Soft Jobs Report Raises Fed Rate Cut Hopes

TLDR

• The US economy lost 23,000 jobs in July, far below the expected gain of 80,000 to 95,000 jobs
• The unemployment rate dipped slightly to 4.1%, down from 4.2%
• Stock futures rose across the board, with Nasdaq 100 futures leading at up 0.8%
• Treasury yields fell, with the 2-year note dropping to 4.18% and the 10-year to 4.62%
• Oil prices rose as US-Iran tensions continued, with explosions reported near the Strait of Hormuz

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The US economy shed 23,000 jobs in July, a sharp miss against economist forecasts that had called for gains of between 80,000 and 95,000 jobs. The unemployment rate edged down to 4.1% from 4.2% the month before.

BREAKING: The US economy unexpectedly loses -23,000 jobs in July, well below expectations of +85,000.

The unemployment rate fell to 4.1%, below expectations of 4.2%.

June’s jobs number was also revised down by -37,000 jobs.

This marks the 3rd biggest monthly job loss since the…

— The Kobeissi Letter (@KobeissiLetter) August 7, 2026

Stock futures responded positively to the weaker-than-expected data. Dow futures added 0.2%, S&P 500 futures climbed 0.4%, and Nasdaq 100 futures led the way with a 0.8% gain.

The softer jobs number shifts focus to the Federal Reserve and what it might do at its next meeting. A weaker labor market typically reduces pressure on the Fed to raise rates, which markets tend to view as a positive signal.

Treasury Yields Drop on Weak Jobs Data

Bond markets moved quickly after the report. The yield on the 2-year Treasury note fell to 4.18%, while the 10-year yield dropped to 4.62%.

Falling yields suggest investors are pricing in a lower chance of a rate hike. The Fed has been weighing inflation concerns against labor market conditions as it sets policy.

The New York Fed’s one-year inflation expectations report is also due Friday. That data will give another read on how consumers view price pressures going forward.

Oil Prices Rise as Iran Tensions Continue

Oil prices extended gains on Friday. The rise came after reports of explosions near the Strait of Hormuz, linked to Iran intercepting what it described as hostile targets.

Iran and Oman are still in talks to reopen the strait. The latest reports suggest Iran may seek to block US and Israeli vessels from using the waterway.

The Strait of Hormuz is a key route for global oil shipments. Any disruption there tends to push oil prices higher and can feed into broader inflation concerns.

How rising oil prices interact with inflation data and Treasury markets will be closely watched in the coming days.

Earnings reports on Friday are light. Vistra Corp, Oklo, Under Armour, and Wendy’s are among the companies reporting results today.

The combination of a soft jobs print, falling yields, and geopolitical tension in the Middle East is shaping a busy end to the trading week.

Markets are now waiting to see whether Friday’s full session follows the direction set by futures ahead of the open.