S&P 500 closes at record high as weak jobs data lifts markets

On August 7, stock markets surged as weekly earnings reports demonstrated robust corporate performance. The S&P 500 reached a new record high, marking the climax of an impressive week for major indexes. This marked a sharp contrast to expectations of a rate increase from the Federal Reserve, who typically raise interest rates when they forecast robust economic growth.

The surprise jobs report showed a decrease in nonfarm payrolls by 23,000 jobs in July, significantly below the anticipated 80,000 increase. While the unemployment rate dipped to 4.1 percent from 4.2 percent, the lower figure was primarily due to workers exiting the labor force. This data dampened the Federal Reserve's anticipated rate hike, decreasing market expectations for a rate increase to around 44 percent, down from 55 percent the previous session and 67 percent a week earlier.

The downward revision in anticipated job growth and ensuing inflation concerns eased inflation worries, alleviating the need for a Fed rate hike. Despite these factors, the S&P 500 and other major indexes recorded their largest weekly percentage gains since mid-April. Top-performing companies included SpaceX, which saw a 15.8% daily increase, Atlassian with a 35.3% gain and Microchip Tech with a 13.9% rise, all of which reported earnings exceeding expectations.

Conversely, Trade Desk saw a 21.9% drop due to revenue forecasts falling short. The Dow Jones Industrial Average climbed 151.83 points, the S&P 500 rose 47.68 points, and the Nasdaq Composite gained 342.26 points. Throughout the week, the S&P 500 increased by 3.58 percent, the Nasdaq rose 5.19 percent, and the Dow climbed 2.96 percent.