The S&P 500 and Nasdaq Are Looking to Snap a Three-day Losing Streak After the July Jobs Report

On Friday, U.S. stocks made modest gains as the S&P 500 and Nasdaq Composite attempted to recover from a three-day losing streak. Investors closely analyzed the July jobs report from the Department of Labor and Big Tech earnings reports from Amazon and Apple.

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Here are the key points driving the market:

• The Dow Jones Industrial Average (DJIA) rose 190 points or 0.5% to reach 35,406.
• The S&P 500 (SPX) gained 20 points or 0.4% to reach 4,521.
• The Nasdaq Composite (COMP) advanced 71 points or 0.5% to reach 14,031.

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Both the S&P 500 and Nasdaq had experienced declines for three consecutive trading days leading up to Thursday's session. All three major indexes mentioned above were poised to record a weekly loss to start August.

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The July jobs report presented a mixed picture for the stock market, as job creation slowed while wage growth remained robust. The data showed that 187,000 new positions were added last month, the slowest pace since December 2020, with revised lower numbers for June and May. However, the unemployment rate dropped to 3.5%.

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The slowing job growth led to expectations that the Federal Reserve's interest-rate hikes were having the intended effect, and the central bank might succeed in cooling the U.S. economy and inflation without causing a crash.

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Despite this, analysts flagged the hotter-than-expected wage growth, represented by the 0.4% increase in average hourly earnings in July, as a potential concern for the Fed. The annualized pace of 4.4% well exceeded the Fed's 2% inflation target.

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Investors exhibited cautious optimism in response to the jobs report, but the market's focus remained on Big Tech earnings from Apple and Amazon, released after the close on Thursday. Additionally, anticipation built for next week's inflation report, which will include the consumer-price index for July.

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The jobs data also contributed to a decline in Treasury yields, easing some of the pressure on stocks. The 10-year yield dropped by 8.7 basis points to 4.102%. Rising yields, especially on the long end of the Treasury curve, were attributed to the stock selloff earlier in the week. It's important to note that bond yields move inversely to prices.

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As investors continue to navigate market developments and economic data, the focus remains on earnings and inflation reports, which could shape future market sentiment and direction.

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