Nasdaq 100: Nasdaq Flips Lower as Hot Payrolls Revive Rate-Hike Trade

• August payrolls tripled expectations at 162,000 versus 53,000 forecast, with unemployment holding at 4.1% and upward revisions to June and July data
• Fed funds futures now price 58% odds of a September rate hike, up from 49.4% the prior day, while 2-year Treasury yields jumped over 7 basis points to 4.425%
• Semiconductor stocks like Astera Labs (+11.63%) and Seagate (+6.25%) held gains, while software names like Adobe (-7.36%) and rate-sensitive sectors including gold miners (-3.76%) and Lululemon (-18%) declined sharply

Market Summary: Strong Jobs Report Revives Fed Rate-Hike Expectations

Key Employment Data

U.S. August payrolls surged to 162,000 jobs, dramatically exceeding the expected 53,000 and marking triple the consensus estimate. The unemployment rate held steady at 4.1%, while June and July figures were revised higher. This robust employment report immediately reversed Thursday's market optimism.

Market Reaction

The Nasdaq Composite held marginal gains of 0.1%, supported primarily by semiconductor strength, while the S&P 500 slipped 0.1% and the Dow Jones Industrial Average dropped 0.3%. Thursday's rally—which saw the Dow gain over 600 points—was quickly erased.

Fed funds futures now price in 58% probability of a September rate hike, up from 49.4% the previous day. The 2-year Treasury yield jumped over 7 basis points to 4.425%, its highest level since January 2025. The 10-year yield climbed toward 4.80%.

Sector Performance

Winners: Semiconductor and AI infrastructure stocks remained resilient, with Astera Labs (+11.63%), Seagate (+6.25%), and KLA (+5.76%) leading gains. Industrials rose 0.57%.

Losers: Software stocks tumbled, with Adobe (-7.36%), Autodesk (-6.3%), and Tesla (-5.04%) declining. Financials fell 0.75%, consumer discretionary dropped 1.21%, and energy decreased 1.49%. Gold miners suffered significantly, with the VanEck Gold Miners ETF down 3.76%.

Lululemon plunged nearly 18% after reporting a 4% revenue decline and slashing full-year guidance from $11-11.15 billion to $10.35-10.5 billion.

Outlook

Next week's inflation reports will determine whether the strong payrolls data sustains Fed hawkishness or if cooling prices support the dovish case for holding rates steady.