Market Minute ⏱️ 8/7/26: Bonds, Stocks Pop After US Jobs Shock

Mike Larson | Editor-in-Chief

Stocks and bonds surged with gold and silver after a shocking employment report hit the tape. The US dollar lost ground along with crude oil, too.

Now, THAT was a surprise! The US economy lost 23,000 jobs in July compared with expectations for a gain of 80,000. The Labor Department also revised figures for May and June down by 103,000 jobs. Average hourly earnings rose just 0.1%, missing forecasts for a 0.3% gain.

Job Gains/Losses (in 1,000s)

While the unemployment rate dipped to 4.1%, some of that was because the labor force shrank. The participation rate measures the percentage of the US population looking for work. It fell to 61.4%, the lowest reading since the 1970s. The lousy data follows reports Federal Reserve Chairman Kevin Warsh could look to raise rates at the Fed’s September meeting – an outcome less likely now than it was before the report.

Are corporate bond investors suffering from AI-indigestion? Confronted with more than $200 billion in bond sales by companies like Amazon.com Inc. (AMZN), Alphabet Inc. (GOOGL), SpaceX (SPCX), they’ve been bidding less aggressively and selling in the secondary market.

That’s causing yields to rise on existing corporate bonds, leaving holders sitting on losses. It’s also driving up the yields AI-focused tech firms have to offer on new bond sales. Still, the capital needs are so great that another $50 billion or more in hyperscaler debt may get dumped on the market after the typical late-summer lull ends on Labor Day. Alphabet just sold $25 billion in bonds with maturities ranging from two years up to 40 years this week.

Finally, metals are on the move again after a multi-month pause. Gold futures jumped 4% over the last five trading days, recently changing hands at $4,415 an ounce. UBS just predicted gold will hit $5,000 again in early 2027, driven by a weaker dollar and ongoing central bank purchases. Meanwhile, copper topped $6.90 a pound yesterday. That’s a fresh all-time high for the metal used in construction, transportation, and AI data centers and the power grid that provides them with electricity.

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