The American economy lost jobs in July for the first time in months, and the stock market went up on the news. That is not a contradiction — it is the entire logic of this market in one morning.

July nonfarm payrolls contracted by 23,000. Wall Street had expected an increase of 83,000. The unemployment rate fell to 4.1% instead of holding at the 4.2% economists forecast, and the labor force participation rate slipped to 61.4% from 61.5% in June. The unemployment rate dropped for the wrong reason: fewer people counted as looking for work, not more people finding it.

The report arrives as a central input for the Federal Reserve, which has been weighing an interest rate hike at its next meeting — a posture driven by inflation and heavy artificial-intelligence capital spending rather than by the labor market. A contracting payroll count makes that hike harder to justify.

Rates, Dollar And The Fed Path

The 10-year Treasury yield fell five basis points to 4.63% and the dollar declined. Money markets still price a Fed hike this year, but no longer before December.

That is a full reversal from the previous session. On Thursday the 10-year yield rose seven basis points as higher oil revived the case for the Fed staying tight, while the dollar posted its biggest gain in two weeks and gold climbed more than 1.4% toward $4,300 an ounce. Two days, two opposite verdicts on the same central bank — one written by crude prices, the other by payrolls.

The Open

The S&P 500 advanced 0.3% after the bell, the Nasdaq Composite climbed 0.8%, and the Dow Jones Industrial Average added 67 points, or 0.1%. The Russell 2000 went the other way, slipping 0.58%. Thursday’s session had closed lower across the board, with the Dow off 0.85%, the S&P 500 down 0.18% and the Nasdaq easing 0.06%.

The week has been a strong one: the S&P 500 is up more than 3% and is heading for a second consecutive weekly gain, while the Nasdaq is tracking its best week since April with a rise above 4%. Semiconductors did the heavy lifting, with the iShares Semiconductor ETF up more than 7% on the week.

One market veteran framed the open question as whether this is a real uptrend or a failed move — noting the problems that drove July’s decline are all still in place, and what changed this week was the mood. Defensively positioned traders were caught out and had to scramble, producing two large trend days, with Hormuz optimism and strong earnings adding to the push.

Market Movers

Doximity more than doubled at one point premarket after its chief executive said the company’s new AI search product earns more than ten times per search what it costs to run.

Twilio rose 17.5% on adjusted earnings of $1.47 a share against a $1.32 consensus, with revenue up 22% to $1.50 billion and organic growth of 17% excluding carrier pass-through fees. Cloudflare gained more than 16.5% on full-year and current-quarter guidance. Atlassian also surged, raising its full-year revenue growth forecast to roughly 20% from 14% to 16% and adding $100 million to its buyback authorization.

Airbnb advanced 8.8% after second-quarter revenue rose 17% to $3.6 billion and GAAP earnings of $1.37 a share landed 9.5% above consensus, helped by travel demand around the FIFA World Cup hosted across North America.

Solar was the policy trade. First Solar advanced more than 7% premarket, SolarEdge rose 1% and the Invesco Solar ETF gained 4% with Sunrun and Enphase also higher after Thursday’s tariff action. First Solar’s thin-film modules do not depend on Chinese crystalline silicon supply chains, so import duties squeeze competitors while leaving its own cost base largely untouched — on top of a second-quarter beat with net income of $423 million, or $3.92 a diluted share, up 23% year over year, and a contracted backlog of 45.1 gigawatts running through 2030.

On the losing side, The Trade Desk fell 27% after adjusted earnings of 34 cents missed the 40-cent estimate and revenue of $715 million came in below the $751 million expected. Wendy’s dropped 2% after global sales fell more than 6%, including an 8.2% decline in the US, and the company withdrew its 2026 outlook. Sezzle also slid. Fiserv remains under pressure after cutting full-year adjusted earnings guidance to $7.20–$7.40 a share from $8.00–$8.30 and guiding organic revenue to flat or down 1%; the stock is off nearly 20% this year after a 68% drop in 2025, with Jana Partners pressing for a strategic review.

Commodities

Oil wavered as traders weighed the Strait of Hormuz negotiations. October Brent traded up 1.25% at $83.52 and September West Texas Intermediate up 1.10% at $78.14 earlier in the session, before slipping to around $82.25 and $77.20 respectively, leaving both benchmarks on course for weekly losses of more than 8%.

That weekly decline traces to Tuesday, when Treasury Secretary Scott Bessent said a Hormuz deal with freedom of movement could come as soon as Wednesday. Thursday reversed part of it, Brent closing up 3.8% at $82.49 after Iranian state media published restrictive draft conditions for the strait. For context, Brent gained 24% in July and WTI 21%, the biggest monthly advance since March.

The World Behind The Tape

President Trump said late Thursday that the Hormuz talks are “moving along,” while Iranian lawmakers spent Friday debating the wording of an agreement with Oman. The published draft would bar American and Israeli vessels from the strait, which carried about a fifth of global oil and liquefied natural gas shipments before the war began in late February.

Supply pressure came from two other directions: Ukraine struck two major Russian refineries overnight, and US imports of Saudi crude fell to zero in July for the first time since 1985. The Houthis attacked Saudi military positions and infrastructure, putting Red Sea routes back in question.

On trade, Trump’s 15% polysilicon duty and minimum import prices — signed Thursday under Section 232 on the advice of Commerce Secretary Howard Lutnick — open another front against China in chips, energy and AI.

What To Watch

Vistra reported second-quarter results this morning and Take-Two posted its fiscal first quarter. Next week brings Barrick and Simon Property on Monday, with Super Micro later in the week. The setup into mid-August is a market betting the Fed stays on hold, a labor market that just weakened, and an oil price that answers to a document being drafted in Tehran.

JBizNews Desk | Wall Street

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