U.S. stocks rebounded after July employment data showed a slowdown, reducing expectations for a September rate hike. Gains in AI-related stocks and strong earnings provided support for the market.
U.S. employment data showed that employment fell by 23,000 in July, below expectations. This reduced the likelihood of the Federal Reserve raising interest rates in September, and the market outlook became more dovish.
The three major stock indexes posted some of their strongest weekly gains on record, supported by strong-performing companies and gains in AI-related stocks.
Among individual stocks, companies whose revenue exceeded market expectations stood out, with SpaceX rising 10.6%, Atlassian gaining 30.2%, and Microchip Technology advancing 13.8%. The software and services index rose, while Cloudflare gained after raising its revenue outlook.
More than 400 S&P 500 companies have reported earnings, of which over 85% beat analyst expectations. Airbnb rose after revenue exceeded expectations, while Trade Desk plunged after its revenue outlook fell short of expectations.
The key market focus is on investors watching the economic outlook and officials' comments against a backdrop of strong corporate earnings and signals of accommodative monetary policy.