Payrolls at 162,000 put a September hike back in play

August payrolls came in at 162,000 on Friday against the 53,000 economists expected — three times consensus — and the bond market repriced the Fed on the spot: the 2-year Treasury yield closed at its highest level since January 2025 and odds of a September hike climbed back to roughly 59%. Crude at six-week highs is pushing the same argument from the other side, and the inflation prints that settle it arrive Thursday and Friday.

The number that moved the week

Nonfarm payrolls grew 162,000 in August, well above the 53,000 consensus in the Dow Jones survey. The unemployment rate held at 4.1%, in line. The 2-year Treasury note yield rose more than 4 basis points to 4.377%, its highest since January 2025; the 10-year added a little over 2 basis points to 4.784%.

That reversed Thursday’s story inside a single session. Thursday, Fed Governor Christopher Waller’s remark that he could support a hold cut September hike odds to 50.4% from 63.2% and lifted all three major indexes more than 1%. By Monday, CME FedWatch had the September 15–16 meeting back at about 58.7% for a quarter-point hike. A day of rate relief, undone by one labor print.

The equity damage was smaller than the rates move suggests. The S&P 500 slipped 0.38% to 7,718.60, the Nasdaq Composite 0.29% to 26,506.99, and the Dow 271.86 points, or 0.51%, to 53,414.25 — three declines, none of them large.

Underneath, it was less benign. Across the roughly 100 large caps in our feed, 72 of the 100 fell and 28 rose. That is the widest gap between a quiet index tape and a poor advance-decline count in weeks, and it is the single thing worth carrying into this morning: Friday was not a broad selloff, it was a rotation that the index level hid.

The proxies show where the rotation went. SPY fell 0.39% to $770.19 and DIA 0.53%, but QQQ, the Nasdaq-100 tracker, rose 0.18% while the broader Nasdaq Composite fell — a gap that only opens when a handful of heavily weighted names carry the index. IWM, the Russell 2000 proxy, rose 0.28%, which does not fit the story at all: small caps are usually the most rate-sensitive thing on the board, and they rose on the day the 2-year hit a multi-year high.

Chips went one way, software the other

Semiconductors did the carrying. Micron (MU) closed at $1,016.59, up 6.10% from Thursday’s $958.16, clearing $1,000 on the back of memory pricing and AI server demand. Advanced Micro Devices (AMD) rose 4.69% to $477.57. Intel (INTC) added 4.51% to $95.80 on 97.4 million shares. Applied Materials (AMAT) gained 4.31% to $454.71, Arm (ARM) 3.92% to $252.09 and Texas Instruments (TXN) 1.82%. XLK, the tech sector fund, was the rare green sector at 0.70%.

The two largest names in the group barely moved: Nvidia (NVDA) rose 0.84% to $230.36 on 134.9 million shares, the heaviest volume in the feed, and Broadcom (AVGO) 0.21%. The bid was in memory and equipment, not in the AI bellwethers.

Software went the other way, hard. Adobe (ADBE) fell 6.73% to $266.51. Snowflake (SNOW) fell 5.41% to $337.18, after rising 16.55% on Thursday. Palantir (PLTR) fell 4.49%, MongoDB (MDB) 4.09%, ServiceNow 2.97%, Salesforce (CRM) 1.97% and Cloudflare (NET) 1.96%. The crypto-linked names went with them: Coinbase (COIN) fell 4.18% and Robinhood (HOOD) 2.09%, after gains of 10.14% and 16.57% respectively the day before.

Line up the two lists and the mechanism is plain. Thursday’s rally was a rate-relief trade, and it bought the most rate-sensitive thing available — high-multiple software with earnings far out in the future. Friday’s payroll number took the rate relief away, and those same names gave the move back within one session. Semiconductors did not participate in either direction, because what is repricing them is not the discount rate but the physical price of DRAM and NAND. Friday separated the two trades that August had blurred together.

That thread runs overnight, too. South Korea’s Kospi rose 2.35% today after a 4.61% gain on Monday — the world’s most memory-heavy index, up nearly 7% in two sessions. Japan’s Nikkei 225 added 0.34% to about 66,625 and Hong Kong’s Hang Seng fell 0.38%.

Two of Friday’s decliners had nothing to do with rates. Adobe named insider Anil Chakravarthy chief executive effective December 1, with Shantanu Narayen moving to executive chair — a continuity pick delivered six days before the company reports, and one the market read as no answer to the question of what generative AI does to Creative Cloud. Oracle (ORCL), which also reports Thursday, went the opposite way and rose 3.08% to $158.78.

Tesla (TSLA) fell 5.92% to $354.08 on 64.8 million shares after its Cybercab launch event in Austin. The event was invite-only, was not livestreamed, Elon Musk did not appear, and it disclosed neither how many vehicles will be deployed nor where. Separately, the National Highway Traffic Safety Administration opened an audit query into whether Tesla correctly self-certified a vehicle that has no steering wheel and no pedals as road-legal.

One decline we cannot source: Netflix (NFLX) fell 5.35% to $78.25 on 40.1 million shares, and nothing in Friday’s curated news feed explains it. Worth flagging as unexplained rather than guessing at a reason.

Oil at six-week highs, energy shares unmoved

Crude is the second half of the inflation problem. Brent is near $100 a barrel and WTI near $93 this morning, six-week highs and a third straight session of gains, after the United States and Iran exchanged strikes over the weekend in a conflict now in its seventh month. US Energy Secretary Chris Wright said Sunday that Washington may not reach a deal to constrain Iran’s nuclear programme. Brent settled Monday at $97.13, up 0.88%, with US markets shut for Labor Day.

Energy equities went on ignoring it. On Friday XLE fell 0.87% to $64.06, Exxon Mobil (XOM) fell 1.69% to $159.47 and Chevron (CVX) 1.29% to $208.60. That is the fourth consecutive session in which the oil price and the shares of the companies that sell oil have moved in opposite directions, and it is now the cleanest disagreement on the board. Energy shares are priced for a supply scare that resolves; the rates market is priced for an inflation impulse that does not.

Gold did not behave either. GLD fell 0.84% to $406.77 on a day of hot inflation data and Middle East escalation — both of which normally argue the other way. Rising real yields appear to be beating the haven bid, which is a coherent explanation but not a comfortable one for anyone holding gold as geopolitical insurance.

The stock most likely to shape today’s Dow is not in our 100-name feed. Novartis said its Phase III Lp(a)HORIZON study of pelacarsen — in patients with elevated lipoprotein(a) and established cardiovascular disease — missed its primary endpoint. Amgen fell in the after-hours session on read-across to olpasiran, its own drug aimed at the same target, and MarketWatch has it as a leading drag on the Dow this morning. Amgen is price-weighted into the Dow near $437, so a move of that size in it counts for more index points than the same percentage move in most of the other 29 members.

Here the paid feed adds a caveat worth having. Amgen’s after-hours print was $415.00 against a $437.23 regular-session close — but on 11 shares. That is not a market, it is a single trade, and the magnitude of the after-hours move should be treated as indicative rather than settled until the opening auction prices it properly.

The stranger detail is the other side. Novartis, whose drug actually failed, traded at $162.90 after hours against a $159.99 close, and on roughly 83,000 shares — real size. The company that ran the failed trial went up; the company that did not run it went down. That is the read-across trade in its purest form, and it is the kind of thing that sometimes retraces once the opening bell puts volume behind it.

The setup this morning reflects the split. Dow futures were down 409 points, or 0.8%, at 2:10 a.m. ET, with S&P 500 futures off 0.2% and Nasdaq-100 futures up 0.2% — the same semis-versus-everything divide as Friday. By around 4 a.m. ET the Dow had slipped to 0.9% lower, the S&P to 0.4%, and the Nasdaq-100’s small gain had faded to roughly flat. Rising trade tension between Canada and the United States is the other item on the wires.

What to watch today

August NFIB small business optimism, this morning. July printed 99.8, the highest since August 2025 and above the survey’s 52-year average of 98.0.
Consumer credit (G.19) for July, 3:00 PM ET. The Fed’s monthly read on household borrowing.
GameStop reports fiscal second-quarter results after the close.
Crude. Brent near $100 and WTI near $93, six-week highs on a third straight advance. The fourth-session divergence between oil and energy equities either closes today or widens.
The 2-year Treasury yield at 4.377%. The most direct live read on how the market is handicapping the September 15–16 FOMC meeting, currently near 58.7% for a quarter-point hike.
Thursday. August PPI before the open; Oracle and Adobe both report after the close.
Friday. August CPI before the open — the last major inflation reading before the FOMC decision.

Not financial advice. iTrading Buddy summarizes publicly available market data and news; every figure above is sourced from the reporting available before the US open on the date shown. Verify anything you act on.