August jobs blowout revives September hike bets

Two storylines dominated the tape this week: a blowout August jobs report that reignited rate-hike bets and blockbuster earnings from Dell Technologies Inc. (NYSE: DELL ) that reinforced the AI infrastructure thesis.

Nonfarm payrolls rose 162,000 in August, the Bureau of Labor Statistics reported — nearly three times the 56,000 consensus and the biggest monthly gain since March.

The unemployment rate held at 4.1%.

July's reported loss of 23,000 was revised to a gain of 21,000, erasing the summer's soft patch.

By Friday afternoon, the odds of a September hike had climbed to 60%.

Stocks held up better than a print this hot would normally allow, even with rate pressure building.

Record Earnings Season Reduces Rate Pressures Wall Street's ability to absorb a hot jobs print without a broader repricing may signal confidence that corporate earnings can outrun higher borrowing costs.

The second quarter of 2026 produced the strongest earnings season since 2021.

FactSet puts the blended S&P 500 earnings growth rate at 50.4% year-over-year — a second straight quarter above 25%, and a seventh straight quarter of double-digit growth.

The strength was broad rather than narrow.

Roughly 76% of S&P 500 companies topped revenue estimates, ahead of both the five- and 10-year averages, and 10 of eleven sectors grew earnings year-over-year.

Read Also: The S&P 500 Got Cheaper While It Rallied.

Here's What Bond Bears Are Missing On Wednesday, New York Fed President John Williams delivered the most important central-bank message of the week.

Williams told CNBC that the recent surge in Treasury yields is not a sign of market dysfunction or fiscal panic, but a straightforward reflection of economic strength. "What's driving it, in large part, is really a strong U.S. economy and a strong economic outlook fueled by big investments in AI and data centers and technology in general," he said.

Dell Reboots the AI Infrastructure Trade Dell's second-quarter 2027 revenue hit a record $47 billion, up 58% year-over-year and beating the $44.92 billion consensus by $2 billion.

Adjusted EPS came in at $7.04, up 203% and blowing past the $4.87 estimate by 44%.

The AI numbers were staggering.

Dell booked $60.9 billion in AI server orders during the quarter, bringing twelve-month cumulative AI orders to $131.7 billion.

AI-optimized server revenue was $16.4 billion, doubling year-over-year.

Next week, all eyes turn to the August CPI report on Thursday, Sept.

11 — just four days before the FOMC's September meeting, and likely the final piece of data that will decide whether the Fed hikes or holds.

S&P 500's Best and Worst Names For the Week Robinhood Markets Inc. (NASDAQ: HOOD ) led the index with a 17.93% five-day gain.

The move followed a cluster of Wall Street upgrades — Morgan Stanley to Overweight with a $150 target, up from $124, and a fresh Outperform start from Scotiabank.

SanDisk Corporation (NASDAQ: SNDK ) added 15.81%, with most of the gains occurring Friday.

Dell Technologies Inc. rounded out the top three at 15.46% on the earnings detailed above.

Edison International (NYSE: EIX ) fell 20.11% after California's legislature adjourned on Aug.

31 without meaningful wildfire liability reform, leaving Southern California Edison exposed to Eaton fire litigation with no cap.

The stock lost roughly a quarter of its value on Monday alone.

Mizuho, Barclays and Argus all cut ratings; JPMorgan took its target to $61 from $82.

Fair Isaac Corporation (NYSE: FICO ) dropped 18.97%, nearly all of it Friday, after Federal Housing Finance Agency Director Bill Pulte directed Fannie Mae and Freddie Mac to accept mortgages underwritten with VantageScore.

Lululemon Athletica Inc. (NASDAQ: LULU ) lost 16.83% after second-quarter revenue of $2.42 billion missed and comparable sales fell 9%.

Management cut full-year revenue guidance to $10.35—$10.5 billion from $11—$11.15 billion, and guided the third quarter to a 10—11% decline.

Image created using artificial intelligence via Midjourney.