The Economy Lost Jobs, Wall Street Threw a Party: What Moved Markets This Week

The American economy shed 23,000 nonfarm payrolls in July.

Wall Street answered with its best week since April.

That is not a contradiction.

It turns on the fact that has defined 2026 and that many investors still find uncomfortable: the Federal Reserve’s next move was supposed to be up.

A shrinking payroll count took it off the table.

The reversal lifted almost everything with a pulse.

The Labor Market Did The Fed’s Work For It The U.S. forecast for July jobs was a gain of roughly 80,000.

But government hiring whiffed.

Payrolls dropped by 53,000.

Private employers still added 30,000 jobs, short of the 78,000 expected.

The unemployment rate ticked down to 4.1% from 4.2%.

That was not strength.

The labor force shrank by 264,000 and the participation rate — the share of working-age adults either employed or looking for work — slid to 61.4%, the lowest since early 2021.

The heavier blow came in the revisions.

May and June were cut by a combined 103,000, leaving the three-month trend materially weaker than the market believed a day earlier.

Average hourly earnings rose 3.2% on the year, the slowest wage pace since 2021.

Why A Bad Report Bought A Strong Close A contracting payroll count removes the case for tightening into a slowing economy.

Odds of a September increase fell to 42% from 58% on Friday, according to CME FedWatch tool.

Lower expected policy rates pulled Treasury yields and the dollar down together, and that combination is the most reliable fuel there is for two assets: long-duration technology stocks and gold.

Both delivered.

The S&P 500 — as tracked by the SPDR S&P 500 ETF Trust (NYSE: SPY ) — rallied 3.5% for the week, notching its best weekly surge since mid-April.

The Nasdaq 100 — tracked by the Invesco QQQ Trust (NASDAQ: QQQ ) — jumped 4.8% for the week, marking its best weekly showing since early May.

Gold jumped 2.4% Friday to $4,347.70 an ounce, a seven-week high, capping a weekly advance of about 7.5% and its strongest week in seven months.

This Week’s Best And Worst S&P 500 Stocks Coherent Corp. (NYSE: COHR ) rose 43.5% in five sessions.

The photonics maker, which builds the optical components that shuttle data between AI chips inside a data center, was repriced on peer results, reports of tighter U.S. restrictions on Chinese optical transceivers and a JPMorgan price target increase to $435 from $380.

It reports next Wednesday.

Palantir Technologies Inc. (NASDAQ: PLTR ) delivered the quarter of the week.

Second-quarter revenue rose 93% year over year to $1.94 billion, U.S. commercial revenue climbed 149% and full-year guidance went to $8.15 billion.

Chief Executive Officer Alex Karp called it “otherworldly.” Shares rose about 29% Tuesday, close to the best session in the company’s history.

Zebra Technologies Corp. (NASDAQ: ZBRA ) was the quieter shock.

The barcode and warehouse automation company earned an adjusted $6.35 a share against a $4.36 consensus, a 45% beat, lifted revenue 20.4% to $1.56 billion and raised full-year guidance to $20.75-$21.25 from $18.30-$18.70.

The other side of the ledger was about weak guidance.

The Trade Desk Inc. (NASDAQ: TTD ) lost roughly a quarter of its value after revenue grew 3% to $715.1 million and third-quarter guidance of at least $650 million landed far below the $805 million expected.

Management replaced its chief financial officer, chief marketing officer and commercial chief in the same release.

Honeywell Aerospace Inc. (NASDAQ: HONA ), spun off in June, cut full-year organic sales growth guidance to 4%-5% from 7%-9% in its first report as a standalone company.

DaVita Inc. (NYSE: DVA ) beat on both lines and fell 17% because it reaffirmed rather than raised an outlook whose midpoint already sat below consensus.