Article Published at 9:20 a.m. CT.
JJ Kinahan is Senior Vice President, Head of Retail Expansion and Alternative Investment Products at Cboe Global Markets, Inc. (Cboe).
Key Takeaways:
- Markets could be volatile amid softness in job growth
- Job numbers diminish rate hike scenario
- Honeywell Aerospace reports weak results, shares tumble
The surprise jobs report gave the markets an early boost that may be tough to hold on to throughout a summer Friday when many folks tend to cut the work-day hours.
July nonfarm payrolls slumped by 23,000 jobs, a big miss from an expectation of an 83,000 gain, and June and July’s numbers were significantly revised downward. The unemployment rate fell to 4.1% from 4.2%. Though the drop in unemployment is usually considered a plus, this one came with a decline to 61.4% in participation, the lowest level in more than five years, meaning fewer folks are looking for jobs.
The numbers also mitigate the rate hike scenario, but as traders absorb the news – that we don’t have job growth -- we could see some volatility in the markets. In early trading, the S&P 500 Index was up 0.32% while the Nasdaq Composite added 0.90%. The Dow Jones Industrial Average was edging higher by 0.15%.
The Trade Desk shares tumbled 23% in early trading after yesterday’s dismal earnings report and outlook for the ad-tech firm. The company blamed the profits and revenue drops on weaker consumer spending, tariffs and higher oil prices.
A lack of catalysts pushed the markets into the red yesterday, ending a rally that seemed like it might have more legs. Higher oil prices smacked market optimism as the proposed passage deal to open shipping through the Strait of Hormuz seemed unworkable. WTI Crude Oil prices, which were treading lower in the $75-per-barrel range in recent sessions, rose 2.8% to close around $77 a barrel. In early trading, they were 0.31% lower.
That, plus mixed earnings results from a handful companies, cut into market sentiment, pushing all three major indices to the downside. The Dow fell off its five-day record-breaking perch, closing lower by 0.85% while the S&P 500 fell 0.18% and the Nasdaq slipped about 0.06%.
Honeywell Aerospace was among the biggest culprits on the Nasdaq and S&P 500, tumbling 23.2% after reporting second-quarter earnings and sales that missed Wall Street’s expectations in it first reporting quarter after June’s spinoff from Honeywell Technologies. Adding to the off-putting results was a softer-than-expected forecast that cut full-year sales growth expectations from 4% to 5%, off earlier guidance of 7% to 9%. In early trading, shares were recovering by 1.5%.
SpaceX shares managed to move ahead yesterday, resisting the “lock-up dump” that can occur when share lockups expire. Not surprisingly, trading volume was more than 110% higher than normal given the much larger float after 911 million new shares were available for trading. The upside might be considered a signal that many of the employees and early investors chose to hang on to their shares. But Day 1 does not make a long-term trend and we could see some resistance if the stock returns to its initial public offering level. Shares were up 3.6% to $119, still notably off from its $135 IPO price and the $225 peak in the first week of trading.
Wendy’s shares slumped 3.7% in early trading after reporting a 7% drop in same-store sales and an 8.2% retreat in system-wide sales amid a slowdown in consumer spending. As a result, the maker of square hamburgers and Frosty’s withdrew its guidance and scratched its dividend, choosing instead to invest in initiatives to build the brand.
Happy trading!
2026 Cboe Exchange, Inc. All rights reserved.
The information provided is for general education and information purposes only. No statement provided should be construed as a recommendation to buy or sell a security, future, financial instrument, investment fund, or other investment product (collectively, a “financial product”), or to provide investment advice.
