How the latest jobs data changes the market calculus 9/4/26

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**Michael Santoli** (0:57)
The Bell is bringing an end to the trading day at the NYSE. Stop soldiers' suicide ringing the bell and at the NASDAQ. Teach for America New York closing out the week at the NASDAQ downstairs. Welcome to Closing Bell Overtime live from Studio B at the NASDAQ market site. I'm Mike Santoli. Melissa Lee is off today. Stocks falling after a stronger than expected jobs report. The Dow losing about 280 points. The S&P 500 and the NASDAQ composite both lower by about three tenths of a percent. The NASDAQ 100 however, with a small gain. For the week, it is a split decision. The Dow slightly lower, the S&P 500 basically flat, but the tech heavy NASDAQ indexes did manage some gains. And yields moving higher following the jobs report, especially on the short end. The two year yield levels not seen since early 2025 We're gonna have much more on that coming up. Let's begin though with markets as the semis versus software push pull playing out once again today. Christina Parts-Nevel is joining me here at the NASDAQ to get into all of it.

**Christina Partesevel** (1:57)
Yeah, I'll start with just the yields because that affects just tech in general. Labor markets resilience really push treasury yields higher. That pressured stocks, Mag-7 pulled back coming off a near record close yesterday led by NVIDIA and Apple. And I know you've said it a few times today, Mike, but to your point, the groups dropped enough to look cheap again. NVIDIA up about 5%, maybe back in favor just on this week. Memory Trade too, also back after an overnight lift, specifically in South Korea, SK Hynex, you can see closing 8% higher. Sandisk, the DRAM ETF, storage names like Seagate, all closing higher today.
Software though, the soft spot. Often the case when you see chips climbing higher, software going in the other direction, the IGV pretty much headed for a 4.5% weekly loss. It's worse since July, so not that long ago, even after a clean beat from Snowflake earlier this week, which lifted the entire group. Today, you got some profit-taking, also some weak guidance from GuideWare, led lower, and then UiPath slipped as a coniCore cut. Actually, they cut it to hold, saying that the valuation was just a little too high after a big run. And then you also had Zscaler falling, despite its own clean beat as CautiousFull. Your guidance overshadowed the quarter. Adobe closing lower, too. There was a leadership shakeup there. One person leaving, people thought it was going to be the next CEO.
And I'm going to end on some more negative stocks. Tesla sliding after regulators opened a probe into whether the cyber cab meets federal safety standards following its cyber cab rollout just yesterday. Also wiping out yesterday's gain shares down about 6 percent, but still up on the week. Last but not least, Lululemon, do you wear Lulu?

**Michael Santoli** (3:36)
Somehow, no.

**Christina Partesevel** (3:36)
Yeah, okay. So Lulu tanking, a sales slowdown and another outlook cut sent it to its lowest level since 2018 A rough welcome for incoming CEO, Heidi O'Neill, who starts on Tuesday, shares down 17 percent, Mike does not wear Lulu.

**Michael Santoli** (3:49)
A rough one or an easy entry point. We'll see for a new CEO. Oh yeah, right, far as low. I guess we'll have to see. Christina, thank you. This morning's employment report showing a gain of 162,000 jobs, much more than was expected. So how is that going to affect the Fed's plans? Steve Leesman joins us now to get into all of it.

**Steve Liesman** (4:06)
Hey, Steve.
Hey, thanks very much, Mike. Yeah, the employment report, which is the market thinking about Fed rate hikes, sparking a tweet from the president, essentially threatening tariffs if the Fed doesn't cut rates. The debate is whether today's 162,000 gain and the start of resurgence of revision to the mean after several months of weakness. Strong numbers, you can see there. Followed job gains is 21,000 in July and 31,000 in June. The three-month average now, 71,000. I would call that healthy, but not necessarily barn burning. Here's some of the data that we're looking at. Leisure and Hospitality is up 62,000, but it had lost 75,000 the prior two months. Local Government Education up by 42,000, it had lost 58,000. The last month, Healthcare, 28,000. That was good. Construction and Manufacturing up 40,000. Some of that could be an effect of what's happening with the AI build out. Now, Futures Markets, they modestly increase the probability of a September hike. You can see right there up to 57% from 50% for September, and then go to December, it's up to 86% from 51%.