Labor Market Data Sets the Tone 07/08/2026
Market Wrap
US stocks finished lower on Thursday as rising oil prices weighed on sentiment and interrupted the market's recent winning streak.
The Dow Jones Industrial Average fell more than 460 points, or 0.9%, snapping a five-session advance. The S&P 500 slipped 0.2%, while the Nasdaq Composite edged 0.1% lower.
Despite the pullback, sentiment across Wall Street has improved. Investors remain hopeful that progress toward reopening the Strait of Hormuz could eventually bring oil prices down and ease inflation pressures. Technology stocks have also regained momentum, with semiconductor shares rebounding sharply after July’s selloff and stronger earnings helping restore confidence in the broader market.
S&P 500 futures were little changed early Friday as investors awaited the July employment report. Economists expect nonfarm payrolls to rise by just 83,000, with the unemployment rate holding at 4.2%. Wage growth and labor-force participation will also be closely watched for signs of underlying strength or weakness in the jobs market.
Earnings continued to support sentiment after the close. Airbnb (ABNB) jumped 9% after beating revenue and earnings expectations, while Cloudflare (NET) surged 16% after issuing stronger-than-expected current-quarter and full-year guidance.
Despite Thursday’s losses, US stocks remain on track for a second consecutive weekly gain. The Nasdaq is positioned for its strongest week since May, helped by a rebound in chip stocks, with the iShares Semiconductor ETF (SOXX) up more than 5% for the week.
Jobs Report Puts Labor Market Under the Microscope
Friday’s US jobs report is expected to show another month of modest hiring, keeping the labor market firmly in focus as investors assess the Federal Reserve’s next move.
Economists expect nonfarm payrolls to rise by about 83,000 in July, up from 57,000 in June, while the unemployment rate is forecast to remain at 4.2%. Average hourly earnings are expected to increase 0.3% from the previous month and 3.5% from a year earlier.
Beyond the headline numbers, investors will be watching labor-force participation closely after it fell to 61.5% in June, its lowest level since 2021. Economists want to know whether that decline was temporary or evidence of a deeper slowdown in a labor market increasingly described as “low-hire, low-fire.”
The report will also carry important implications for monetary policy. Fed officials remain focused on inflation, but further deterioration in employment could complicate the case for additional rate hikes later this year.
Some economists already expect labor-market weakness to become more visible in the coming months, potentially shifting the debate from further tightening back toward rate cuts if unemployment begins to rise meaningfully.
Stocks on the Move
- Airbnb (ABNB): Shares surged about 7% after second-quarter earnings and revenue both topped expectations. The company earned $1.37 per share on revenue of $3.61 billion, ahead of Wall Street forecasts.
- Lyft (LYFT): Shares edged higher after second-quarter revenue of $1.84 billion beat estimates, while earnings of 13 cents per share came in just below expectations.
- DraftKings (DKNG): Shares fell more than 1.5% after second-quarter revenue missed forecasts and the company posted a wider-than-expected loss. DraftKings nevertheless reaffirmed its full-year revenue and adjusted EBITDA outlook.
- Twilio (TWLO): Shares jumped about 16% after the company issued stronger-than-expected current-quarter guidance and raised its full-year revenue growth forecast to 18%–18.5%, well above its previous outlook.
- Trade Desk (TTD): Shares plunged 22% after second-quarter earnings and revenue both missed expectations. Adjusted earnings came in at 34 cents per share on revenue of $715 million, below Wall Street forecasts.
Watchlist: TTD, NET, ABNB, LYFT, DKNG, SG, CART, AKAM, MU, OKLO
Key Economic Events Today
Economic Data (EST)
- 08:30 AM — USD Unemployment Rate
- 08:30 AM — USD Non-Farm Employment Change
- 10:00 AM — USD FOMC Member Barkin Speaks
Earnings
Before Market Open: Vistra Corp. (VST), PPL Corp. (PPL), Oklo Inc. (OKLO), Under Armour (UA), Take-Two Interactive (TTWO)
