US equities rally as soft jobs data cools rate hike bets

US markets steady as CPI report looms after weak payrolls

United States (US) quity markets finished higher on Friday and for the week after a softer-than-expected jobs report reduced the odds of a near-term Federal Reserve (Fed) rate hike, further supporting already buoyant risk appetite. The Nasdaq led the charge, finishing 5.12% higher for the week. The S&P 500 posted its best week since April, rising 3.58%, while the Dow Jones added 1552 points or 2.96%.

The July non-farm payrolls (NFP) report showed the US economy unexpectedly shed 23,000 jobs, well below the +80,000 consensus forecast, with prior months also revised lower by a combined 103,000. At the same time, the unemployment rate edged down to 4.1% from 4.2% as the participation rate fell to 61.4% – the lowest since early 2021 – reflecting more workers leaving the labour force.

These worrying signs of a cooling labour market, combined with lower oil prices, prompted the rates market to reprice the odds of a Fed hike in September down to 44% from 65% a week earlier, giving equities an additional tailwind despite unresolved geopolitical tensions in the Middle East.

Middle East talks hinge on Iran's tough conditions

On the Middle East front, while Iran and Oman have indicated they are 'very close' to a temporary shipping arrangement for the Strait of Hormuz, Tehran has been quick to signal that a deal with Oman alone will not suffice. Iranian officials have laid out a stringent set of conditions, including substantial compensation, an end to the US naval blockade, sanctions relief, and new restrictions on vessel transit.

While these demands will not sit easily with Washington, there has been a noticeable absence of hawkish pushback so far from the US administration. President Trump reportedly said he is 'low-keying' it on Iran and prioritising economic pressure ahead of military options.

Earnings season winds down as key names still to report

With around 81% of US companies now reported, earnings season hits a quieter patch this week. The main highlights are reports from Super Micro Computer, CoreWeave and JD.com, leaving just a handful of key names still to come, including Home Depot, Walmart, Target, Deere, Nvidia, Cisco, Applied Materials, CrowdStrike, Marvell and Micron.

Aside from earnings and developments in the Middle East, Wednesday night's consumer price index (CPI) report will be a key driver for equity markets and help shape expectations ahead of the Fed's meeting next month. 

CPI

Date: Wednesday, 12 August at 10.30pm AEST

Last month's June CPI report was cooler than expected, with the annual headline rate easing to 3.5% from 4.2%, below forecasts of 3.8%. Core CPI fell to 2.6% year-on-year (YoY) from 2.9% previously – well below expectations and the softest reading in several months.

July's figures will be scrutinised for evidence of whether that moderation is sustained. Consensus expects headline inflation to fall to 3.4% YoY and the core reading to edge lower to 2.5%.

An outcome in line with these expectations would strengthen the case for the Fed to keep rates on hold next month, while a hotter-than-expected print would likely push rate-hike probabilities higher again towards 60% ahead of the September Federal Open Market Committee (FOMC) meeting.

US core inflation rate chart

Nasdaq 100 technical analysis

From its late-March low of 22,841, the Nasdaq 100 launched a powerful 35% rally in just over nine weeks to reach a record high of 30,762 in early June. The move was in line with our bullish outlook back in mid-April, although it hit the 30,000 target some six months earlier than we had anticipated.

The correction since then into the 28,000ish support area has played out largely as expected, and the subsequent rally reaffirms the view that the correction from the 30,762 high is likely complete at the recent 27,176 capitulation low, and the uptrend has resumed.

In summary – provided the Nasdaq 100 remains above the recent 27,176 clearing event low, we remain bullish and are looking for a retest and break of the 30,762-record high, with scope towards 32,000.

Nasdaq 100 cash daily chart 

Dow Jones cash technical analysis

From its late-March low of 45,063, the Dow Jones has staged an impressive rally which, at last week's high of 54,749, represents a gain of 21.5% in just four and a half months.

The advance has been orderly, with pullbacks in June and July of around 3.3% both holding logical support zones (at 50,000 and 51,500) before the index rebounded to fresh record highs.

Looking ahead, provided the Dow holds above support in the 53,000 area, the uptrend remains intact, with scope for another leg higher towards 56,000.

A sustained break below the 53,000 support zone, however, would signal that a deeper decline is underway, opening the way for a retest of 51,500 and potentially 50,000.

Dow Jones cash daily chart  

• _{Source: TradingView. The figures stated are as of 10 August 2026. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}