Nasdaq 100 and S&P Show Volatility as Jobs Data Cements Fed Pivot

US job growth has slowed, revealing deeper issues in the labour market. New data confirms weaker hiring, with more people unemployed than job openings for the first time since the pandemic.

This slowdown may be linked to import tariffs and immigration limits, which have reduced the labour supply and hindered new business growth. The weakness stems mainly from fewer new hires rather than increased layoffs, indicating low movement in the job market. Nasdaq 100 and S&P 500 surged on the news and then pulled back slightly as investors digested the data.

Weak Jobs Data Strengthens Case for Fed Cut in September

The chart below shows that nonfarm employment in August increased by only 22,000 jobs, well below expectations of 75,000. The July figure was revised higher to 79,000, but May and June have already undergone sharp downward revisions.

This slow growth in the job market is the result of weaker business formation and policy uncertainty. According to the BLS report, hiring has slowed significantly while layoffs remain low. The chart below shows that the unemployment rate has risen to 4.3%.

Moreover, unemployed people now outnumber job vacancies for the first time since 2020. The chart below shows that the number of unemployed individuals in the US is rising, while job openings are declining.

Trump’s tariff policies may contribute to the current weakness in hiring. During Trump’s presidency, the tariff rates increased to historic levels. This uncertainty previously triggered inflation fears and prompted the Fed to pause rate cuts. However, with growth slowing and inflation risks easing, the Fed now has room to cut rates in September.

This shift in policy outlook has reinforced bullish sentiment in equities, with the S&P 500 and Nasdaq initially extending gains before retreating from intraday highs. The pullback reflects caution near technical resistance, but broader expectations for Fed easing remain intact.

Deep Revisions and Data Volatility Raise Structural Concerns

Beyond the headline jobs miss, structural weaknesses are emerging. The August job count is often revised higher, but economists see a trend of slowing momentum. Next Tuesday, the BLS will publish preliminary revisions for the 12 months through March. Based on wage records, the number of jobs that might be cut could be up to 800,000, exceeding previous estimates. This means the job market could have been much weaker than it looked.

Trump’s decision to fire BLS Commissioner Erika McEntarfer after major data revisions added political tension. Moreover, his nominee, E.J. Antoni, has even suggested ending the monthly jobs report. As labour data becomes increasingly uncertain and relies heavily on estimates, markets may shift their focus toward long-term trends rather than monthly figures.

Investors in tech and growth stocks, within the Nasdaq, are closely watching these revisions, as any confirmation of deeper labour weakness could accelerate expectations of prolonged Fed easing.

Nasdaq 100 and S&P 500 Technical Analysis

Nasdaq 100 Shows Volatility as Fed Pivot Ignites Bullish Momentum

The daily chart for the Nasdaq 100 shows that the index has formed an inverted head and shoulders pattern and has broken above the neckline near the 22,700 region. Following the breakout, the index has developed an ascending broadening wedge pattern, indicating strong volatility.

The release of the jobs data triggered a sharp move higher on Friday, but the index later pulled back from session highs, showing hesitation near the upper boundary of the wedge.

The key resistance remains at the 24,500 level, while strong support is seen around 22,700. A decisive move above resistance could confirm continuation, while a drop below the 22,700 may signal a deeper correction.

The 4-hour chart for the Nasdaq 100 index shows that it has been trading within an ascending channel pattern since June 2025. This ascending channel reflects a bullish trend and triggered a strong rally during the first few hours following the release of the jobs data.

A break below the 23,000 level could initiate a sharp correction in the Nasdaq 100 toward the 22,000 to 21,000 region. Meanwhile, the ascending channel indicates strong resistance around the 25,000 level.

S&P 500 Holds Bullish Channel

The daily chart for the S&P 500 shows that the index has been trading within an ascending channel after breaking out above the neckline at the 6,000 level.
The index formed an inverted head and shoulders pattern during the first two quarters of 2025.

Following the breakout from this pattern, the index has maintained a strong bullish trend. The key resistance within this uptrend lies near the 6,700 level, while the 50-day and 200-day SMAs provide strong support.

The index pushed to a new record level after the jobs release but faced mild profit-taking, keeping prices within the channel. This suggests a temporary pause rather than a reversal.

The strong support and resistance for the S&P 500 are also visible in the 4-hour chart, which shows resistance at the upper boundary of the ascending channel near the 6,700 region. As long as the S&P 500 trades within this channel, the immediate trend remains strongly bullish.