For the week ending Fri, 07 Aug 2026 - US market performance can best be summed up as “recovery”.
Over the past 5 trading days, the 3 composite indexes made ‘credible’ gains: (see above)
-
DJIA: +2.42%
-
S&P 500: +3.37%
-
Nasdaq: +4.86%
This as, the indexes remain ‘acutely’ sensitive and continue to be weigh down by below key factors:
Middle East Tensions & Oil Volatility:
-
There was a moment of ‘calmness’ as the Gulf states had US halt its bombing (of Iran) as fear that all the counterstrikes could engulf the Gulf countries in the process, leaving widespread geographical destruction by the time all the bombings are done.
-
Fluctuating progress on reopening the Strait of Hormuz amid the U.S.-Iran conflict pushed Brent crude back above $82–$83 a barrel, renewing energy supply anxiety.
Inflation Reignite:
-
Rising crude and shipping costs fueled fears that consumer inflation could remain sticky above 3%, complicating US macroeconomic backdrop.
-
Actually, US inflation will stay at 3% high or even rise. Countries hit by the Strait closure face higher oil costs and will pass those expenses onto goods imported by the US.
AI Capital Expenditure vs. Returns:
-
US market is still harbouring mixed reactions to high-profile corporate earnings (eg. SPCX and major tech firms - META, AMZN, GOOG etc..) with growing investor scrutiny over whether massive capex on AI build out, will yield sufficient short-term returns.
Spike in Treasury Yields:
-
Sell-offs in long-dated government bonds pushed the 30-year Treasury yield to a 19-year high of 5.28% and the 10-year toward 4.75%, weighing on equity valuations and tightening financial conditions.
-
This comes despite the Fed decided to keep interest rate unchanged in July 2026 FOMC meeting.
-
However, investors feared that holding short-term rates steady amidst (a) mounting energy shocks, (b) heavy AI corporate borrowing, and (c) a divided central bank would fail to contain resurgent inflation.
With the key factors having a strangle hold on the market, US economic reports have taken a backseat.
Regardless, as investors in the US market, it is necessary to know the macro situations.
For the week, these were the reports out:
-
Tue, 04 Aug 2026 - US Trade Balance.
-
Tue, 04 Aug 2026 - US Jobs Opening and Labour Turnover Survey (JOLTs).
-
Wed, 05 Aug 2026 - ADP Non-farm Payroll.
-
Thu, 06 Aug 2026 - Jobless claims.
-
Fri, 07 Aug 2026 - US Non-farm Payroll.
US Trade Balance.
US Bureau of Economic Analysis (BEA) and Census Bureau reported on June 2026’s trade deficit narrowed by -5.54% to -$73.3 billion vs market consensus of -$73 billion vs May 2026’s -$77.6 billion. (see above))
This as imports dropped -1.8% to $388.0 billion while exports also dipped to a lesser extent of -0.9% to $314.7 billion.
The “mixed” US Trade balance report’s positive side is headline trade deficit shrank more than expected, driven by a lower goods deficit and a rising services surplus.
However, the narrowing happened mostly because imports fell faster than exports, pointing to a cooling in domestic demand rather than an aggressive surge in foreign sales.
US Jobs Opening & Labour Turnover surveys (JOLTs)
US job openings fell slightly in June 2026. US labour market though continued to show resilience in the face of an economic shock from the Middle East conflict and the closure of the Strait of Hormuz.
US Labour Dept said that employers posted 7.36 million vacancies vs market consensus of 7.44 million vs May 2026’s 7.54 million. (see above)
Little changed in layoffs, remaining at 1.8 million, while the number of people quitting their jobs, a sign of confidence in their prospects - rose marginally.
The June hiring uptick was largely driven by industries such as construction & manufacturing,
While some of the highest decreases were seen in the number of jobs in education & health services, that lost some -133,000 jobs, or -8% since May 2026.
Overall, demand is cooling in an orderly way, that helps ease inflation pressures without causing a recession.
ADP Non-farm Payroll.
For July 2026, US private-sector employment increased by 44,000 jobs vs analysts’ estimates of 68,000 jobs vs June 2026’s downwards revised 95,000 jobs. (see above)
It is the smallest monthly gain since January 2026.
-
Goods-producing jobs fell -3,000, the first monthly decline in 7 months.
-
Service-producing jobs rose +47,000, the smallest monthly increase in 4 months.
Pay gains for:
-
Job-stayers held steady at 4.4% last month.
-
Job-changers rose to 7%, the largest YoY increase since August 2025, indicating some supply constraints in parts of the labour market.
Overall, the report is weak.
The US job market is cooling down, showing a sharp drop in hiring by private companies.
If there is anything positive about a cooling US labour market is that it becomes an alibi for Fed chair Kevin Warsh on why interest rate should not be hike.
US Jobless Claims.
Latest US Department of Labour report shows initial and continuing claims remaining near steady levels, reflecting overall labour market stability characterized by low layoffs alongside a slow pace of hiring.
Weekly claims.
For week ending 01 Aug 2026, weekly jobless claims rose by +1,000 to a seasonally adjusted 199,000 vs analysts forecast of 203,000 vs previous week upwards revised 198,000. (see below)
The 4-week moving average decreased by -4,500 to 198,750, dropping below the 200,000 threshold for the first time since October 2022.
Continuing claims.
For week ending 25 Jul 2026, continuing claims increased by +24,000 to 1.801 million, moving back above the psychological 1.8 million mark, slightly higher than consensus estimates of 1.79 million and previous week’s downwards revised 1.777 million. (see above)
Funnily enough, its 4-week moving average ticked down by -5,000 to 1.791 million.
While weekly jobless claims show low layoffs, continuing claims suggests that finding alternative job is taking longer. This indicates that hiring has slowed down and the overall job market is cooling.
US Non-farm Payroll (NFP).
US economy unexpectedly shed jobs in July 2026.
Job gains reported for the prior 2 months have been revised sharply lower, tempering financial market expectations for an interest rate hike from US central bank next month.
Headline payroll.
For July 2026, non-farm payrolls unexpectedly dropped by -23,000 jobs, missing economists’ consensus expectation of 85,000 increase and June 2026’s downwards revised 20,000. (see above)
It also represents the first major contraction in months.
Sector performance.
Losses were driven heavily by a drop of -53,000 government jobs (primarily local government education shifts) and weakness in retail trade, while healthcare continued modest positive trends.
According to US Bureau of Labour Statistics (BLS), payrolls, have a tendency to be softer in the July month. Economists have viewed US labour market as being in a “slow hire, slow fire” mode.
Unemployment rate.
Friday NFP report also showed July 2026 unemployment rate dropped to 4.1% from June 2026’s 4.2%.
This was mainly because 264,000 people stopped looking for work, pushing labour participation down to a near 5½ year low of 61.4%, slowing down overall hiring.
In short, the NFP report is weak with US economy outright lost jobs rather than addition, not to mention previous months’ readings have been revised downward heavily.
The lower unemployment rate did not reflect economic strength; rather, it dropped because people stopped looking for work and exited the labour force.
In summary, US labour market remains in a "slow hire, slow fire" phase, where low layoffs mask a growing difficulty for job seekers to find work.
Shrinking labour participation is quietly masking weaker private-sector demand rather than reflecting economic strength.
Consequently, US economy is cooling enough to cap wage inflation, but persistent energy shocks and high interest rates risk turning the slowdown into broader stagnation. Agree ?
Remember to check out my other posts. (See below). Help to Repost ok, Thanks.
Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.
-
Do you think US market will end ‘higher’ this week ?
-
Do you think US inflation report will impact US market sentiments this week ?
If you find this post interesting, give it wings! ️ Repost and share the insights ?
Do consider “Follow me” and get firsthand read of my daily new post. Thank you.
Comments
Market fell across the board on Mon. Lucky the fall is marginal.
Same negative catalysts dampening sentiments - (1) Middle East oil & Straits situation, (2) semiconductor down by after news of INTC $15 billion stock sales to fund AI build out.
Investors were also (3) jittery about CPI inflation due on Wed, 12 Aug 2026.
Will be a "red" day for US market on fateful Tuesday ? What do you think ?
US lay claims for compensation when it is the aggressor ? A lack of a possible peace deal and the Straits' continual closure spooked investors.
Oil has briefly touched $90 per barrel during intraday trading.
Worries over CPI inflation numbers persisted.
Tech stocks again pulled back, dragging market along with it due to its weightage.
This should be the relief investors are waiting for. Do you think this is true ?
Both DJIA and S&P 500 that were in the "red" earlier in the day, has turned "green" for now.
If inflation concerns remain, things just might turn out differently by the time 4pm arrives. There is need to be vigilant - agree ?
Help to Repost pls - it is important to me & it enables more people to read about it ok. Thanks v much..