S&P500 and Nasdaq 100: Forecast Weakens as US Jobs Data Fuels Fed Cut Bets Today

S&P 500 Dips as Jobs Miss Spurs Fed Rate Cut Bets

U.S. stocks edged lower Friday after a weaker-than-expected jobs report and disappointing tech earnings cast doubt on the market’s recent rally. The S&P 500 futures dipped 0.16%, with the Nasdaq 100 futures off 0.23% and the Dow futures falling 67 points, or 0.15%. The pullback came as traders weighed downbeat labor data and fresh tariff hikes from the White House.

The July nonfarm payroll report showed just 73,000 jobs added—well short of the 100,000 estimate and overshadowed by a massive downward revision of 258,000 jobs to May and June figures. The unemployment rate ticked up to 4.2%, while the labor force participation rate dropped to 62.2%. A broader measure of unemployment, which includes discouraged and underemployed workers, climbed to 7.9%, its highest since March.

Will the Federal Reserve Respond with a September Rate Cut?

The dismal labor data jolted rate expectations. Fed funds futures now imply a 63% probability of a rate cut in September, up from 40% the day before. Treasury yields declined as traders priced in a more dovish path for monetary policy. Market pressure on Fed Chair Jerome Powell intensified, especially after President Trump again lashed out, calling Powell a “stubborn MORON” and demanding immediate cuts.

Which Sectors Are Holding Up as Job Growth Slows?

Sector performance was uneven in July. Health care continued to outperform, adding 55,000 jobs, supported by ongoing post-COVID demand.

Social assistance added 18,000 jobs, while federal government employment contracted by 12,000, bringing total losses since January to 84,000. Elon Musk’s Department of Government Efficiency has been pushing cost-cutting across federal agencies.

Wage growth was modest, rising 0.3% month-over-month and 3.9% year-over-year, slightly ahead of expectations but insufficient to counter hiring softness.

Big Tech Moves Fail to Steady Markets

Extended trading saw Amazon shares fall over 6% after the company issued light operating income guidance for the current quarter.

Apple, by contrast, climbed 2% following an earnings and revenue beat. These mixed results highlight growing concerns around tech valuations despite enthusiasm around artificial intelligence.

Thursday’s session saw the S&P 500 and Nasdaq fade from intraday highs to close lower, marking a third straight loss for the S&P 500.

What’s the Short-Term Outlook for Traders?

The S&P 500 is in a position to finish July, up 2.2%, while the Nasdaq has gained 3.7%.

However, week-to-date figures show mild losses, with the S&P down 0.8% and the Dow off 1.7%. With labor data now adding to monetary policy uncertainty, equities may struggle near term.

Traders should watch for confirmation from Fed speakers or economic prints that could cement the case for a rate cut and revive bullish momentum.

More Information in our Economic Calendar.