US Market Breakdown: Jobs Surge Revives Hike Bets, Week of 31 August 2026

The week of 31 August looked calm in the index numbers and was anything but underneath them. The S&P 500 ended Friday at 7,718.60, up just 0.1% over the five sessions; the Nasdaq Composite added 0.4% to 26,506.99 and the Dow Jones Industrial Average slipped 0.3% to 53,414.25. Getting there took a two-day slide on renewed US strikes against Iran, the best session in a month on Thursday, and a sharp Friday reversal.

The reversal was the story. August nonfarm payrolls — the monthly employment report published by the Bureau of Labor Statistics on the first Friday of the month, and the most closely watched data release in American markets — showed the economy added 162,000 jobs against a consensus near 53,000. Treasury yields jumped, and traders moved back towards pricing a Federal Reserve interest rate rise at the meeting on 15-16 September. Unusually for the past decade, the argument on Wall Street is about hiking, not cutting.

One note on timing: Monday 7 September was Labor Day, a full holiday for the New York Stock Exchange, Nasdaq and the US bond market. There was no Monday session, so Friday 4 September remains the most recent completed day of American trading.

Wall Street

Monday 31 August opened the week badly. The S&P 500 fell 0.33% to 7,686.14, the Nasdaq eased 0.12% to 26,370.89 and the Dow lost 374.09 points, or 0.7%, to 53,185.90, after the United States and Iran traded fire for the first time in a month. Even so, all three indices closed out August with a monthly gain.

Tuesday was worse. Fresh US airstrikes on Islamic Revolutionary Guard Corps targets sent crude sharply higher, bond yields with it, and equities down across almost every sector. The S&P 500 fell 54.67 points, or 0.7%, to 7,631.47; the Dow dropped 419.02 points, or 0.8%, to 52,766.88; and the Nasdaq shed 271.11 points, or 1%, to 26,099.77. Nvidia and Amazon were, per CNBC, the heaviest single weights on the market that day.

Wednesday brought a pause. With Treasury yields taking a breather from a run that had carried the 10-year note to an intraday 4.818% — its highest since November 2023 — the S&P 500 rose 0.46% to 7,666.60, the Nasdaq 0.45% to 26,217.83 and the Dow 295.07 points, or 0.56%, to 53,061.95, snapping a three-day losing streak, with Nvidia doing much of the Dow's lifting.

Thursday was the best day in a month. Fed governor Christopher Waller said that while inflation remained "meaningfully above" the 2% target, recent trends "suggest we are finally seeing some signs of disinflation" — and that he would be inclined to support holding rates steady if the next fortnight of data cooperated. Rate-hike bets fell back towards a coin flip. The Dow climbed 624.16 points, or 1.18%, to 53,686.11, the S&P 500 rose 1.06% to 7,747.71 and the Nasdaq gained 1.4% to 26,584.06.

Friday undid a chunk of it. After the payrolls surprise, the Dow fell 271.86 points, or 0.51%, to 53,414.25, the S&P 500 slid 0.38% and the Nasdaq lost 0.29%. The damage was concentrated rather than broad: two of the week's largest single-stock falls happened to land in the same session.

The week's biggest movers

Lululemon (LULU.US) was the week's worst large-cap performer. Shares fell roughly 17% on Friday to close near $101, touching about $98 intraday — an eight-year low — after a third cut to full-year guidance in six months. Interim co-chief executive and finance chief Meghan Frank blamed "negative commentary in the media and social channels" for weaker traffic, and pointed to softness in core women's bottoms, historically the brand's strongest category.

Tesla (TSLA.US) fell almost 6% on Friday, its worst session since 23 July, after a private Cybercab launch event in Austin that ran about 15 minutes, did not feature Elon Musk, and gave no numbers on how many robotaxis would be deployed or where. Barclays analyst Dan Levy called the lack of direct communication "somewhat disappointing", questioning why the event was not streamed.

Snowflake (SNOW.US) went the other way, jumping about 22% in after-hours trading on Wednesday evening and closing Thursday more than 17% higher after a large earnings beat and a raised full-year outlook. US shares trade in extended sessions either side of the 9:30am-4pm New York day, so the first reaction to results lands the evening before the closing price you see.

Broadcom (AVGO.US) fell despite a strong quarter, dropping as much as 6.3% by mid-morning on Thursday and finishing the session lower. Revenue and artificial intelligence chip sales both beat, but fourth-quarter revenue guidance came in under consensus and gross margin guidance stepped down.

Meta Platforms (META.US) rose 3.7% on Thursday after opening paid developer access to Muse Spark 1.3, its latest AI model, which Mark Zuckerberg described as the company's biggest improvement yet in coding and agentic work. It scored 75.4 on the DeepSWE v1.1 coding benchmark.

Ford (F.US) was a quiet winner, closing the week at $14.62, up about 5% from the prior Friday's $13.88. General Motors (GM.US) added 1.73% to $87.76.

Energy majors did well early. Chevron (CVX.US) and ExxonMobil (XOM.US) rose 2.1% and 2.7% respectively as crude spiked on the Iran headlines. Nvidia (NVDA.US) closed Friday at $230.36, up 0.84% on the session and just short of its $235.74 record.

Company news in focus

The week's largest deal came on 31 August, when Aon agreed to buy USI Insurance Services from private equity group KKR and other shareholders for $17bn in cash — roughly £12.6bn at Friday's rate of $1.352 to the pound. USI is the tenth-largest US insurance broker, with about $3bn of annual revenue, more than 10,500 staff and close to 200 offices, and takes Aon deep into the US middle market. KKR said the exit delivered around six times its money on a 2017 investment, worth about $3.3bn. Completion is expected in the fourth quarter.

Apple changed chief executive mid-week: John Ternus formally took over on 1 September, with Tim Cook moving to executive chairman after 15 years in the job. Ternus, who ran hardware engineering for the iPhone, iPad, Mac and Vision Pro, inherits the company days before its annual product launch. The shares rose about 2.2% in Tuesday midday trading, per NBC News.

Adobe announced its own succession on 3 September. Anil Chakravarthy, who runs its customer experience orchestration business and worldwide field operations, becomes president and chief executive on 1 December; Shantanu Narayen, who flagged his departure in March, moves to executive chair.

Tesla's Cybercab problems were not confined to the presentation. The National Highway Traffic Safety Administration opened an "audit query" to assess whether Tesla had correctly self-certified the vehicle as meeting federal road-safety standards — a regulatory overhang alongside the analyst scepticism.

Meta Platforms confirmed it would begin manufacturing its custom "Iris" AI chip in September with Broadcom and TSMC, part of a push to lean less heavily on bought-in graphics processors. Lululemon's incoming chief executive Heidi O'Neill starts on 8 September, arriving to a share price at an eight-year low.

Earnings in focus

A note on the calendar: large US technology companies often run fiscal years offset from the calendar, so a "third quarter" reported in September may cover the summer.

Snowflake reported second-quarter results on 2 September: adjusted earnings of $0.62 a share against $0.45 expected, revenue of $1.55bn against $1.48bn, and product revenue up 37% year on year. It lifted full-year product revenue guidance to $6.07bn from $5.84bn and raised its full-year operating margin target to 14.5% from 13.5%.

Broadcom also reported on 2 September, with revenue of $29.6bn, up 86% year on year, and adjusted earnings of $3.32 a share. AI semiconductor revenue reached $16.7bn, up 221% year on year and 54% on the prior quarter, and now accounts for 56% of the group. Management reiterated a target of $100bn of AI chip revenue in fiscal 2027. What the market seized on was the fourth-quarter guide of about $34.8bn against consensus of $35.03bn, and gross margin guidance of 73% versus 78% a year earlier.

Zscaler reported fourth-quarter results on 3 September: revenue of $898.2m, up 25% and ahead of the $877.4m consensus, with adjusted earnings of $1.19 a share against $1.08 expected. Guidance for the new fiscal year implying growth of 16.6% to 17.5% — down from 25% — did the damage, and the shares fell around 4% on Friday.

Lululemon's numbers, reported after Thursday's close, were the starkest split of the week: adjusted earnings of $2.92 a share against $1.82 expected, but revenue down 4% to $2.42bn versus $2.46bn forecast, comparable sales down 9%, and full-year revenue guidance cut to $10.35bn-$10.5bn, a fall of 5% to 7%, from flat-to-down-1% previously.

Sectors in focus

Energy led the S&P 500 for the week, and consumer discretionary lagged — an unusually neat summary of what actually happened. Crude was pushed higher by the Iran exchanges, lifting Chevron and ExxonMobil, while the discretionary sector carried both Tesla and Lululemon, two of the week's heaviest fallers.

The concentration point is worth spelling out. The Dow and the equal-weighted version of the S&P 500 both fell over the week, while the standard market-cap-weighted S&P 500 and the Nasdaq rose — supported by Nvidia and a handful of other very large stocks. For a UK investor holding a US tracker, that gap matters: the headline index gain came from a small number of megacaps, not from breadth. Broadcom selling off on guidance despite AI revenue up 221% says something similar about how far expectations have run ahead of the growth numbers.

Technology was not uniform either: Snowflake surged, Zscaler fell on a slower growth guide, and Oracle advanced 3% on Thursday ahead of its own results.

Macro and the Fed

The August employment report was the week's pivot. Payrolls rose 162,000 against a consensus of 53,000 in the Dow Jones survey (Bloomberg's poll had 55,000); the unemployment rate held at 4.1%; and average hourly earnings rose 0.3% on the month to $37.75, up 3.1% on the year. Prior months were revised up: June from +20,000 to +31,000, and July from -23,000 to +21,000. Indeed's Hiring Lab put the three-month average at roughly 71,000 a month, up from just over 38,000 as of July.

Market-implied odds of a September rate rise moved to roughly 60% after the report, having sat near a coin flip following Waller's Thursday remarks. Fed chair Kevin Warsh struck a hawkish tone at Jackson Hole; Waller's position is explicitly conditional on the inflation data due before the meeting.

In bonds, the 10-year Treasury yield rose about 6 basis points over the week to 4.78%, the 30-year added 3 basis points to 5.24% and the one-year fell 2 basis points to 4.11%, per Bloomberg data. The two-year stood at 4.37% on Friday. The dollar index held around the 99 mark, with the pound at roughly $1.352.

Commodities did the shouting. US crude gained more than 9% over the week to Thursday, according to CNBC, with Brent above $97 a barrel and West Texas Intermediate near $92 on Friday. Iran struck US Gulf allies, with Kuwait intercepting incoming missiles and drones, and the US said it had hit three Iranian oil tankers. Energy Secretary Chris Wright told CNBC that more than 17 million barrels moved through the Strait of Hormuz on Monday, the highest since the conflict began in February. Spot gold was quoted around $4,403 an ounce on Friday morning.

Still to come

The Fed's pre-meeting blackout began on 5 September and runs to 17 September, so Friday's CPI lands with no Fed official able to comment on it.

This article is for information and education only. It is not financial advice or a recommendation to buy, sell or hold any investment. Always do your own research.