US EQUITY OPEN: Stocks bid after soft payrolls report pares Fed rate hike expectations

OPEN: Equities opened in the green after a softer than expected US Nonfarm Payrolls report saw markets dial back Fed rate hike expectations. Outperformance is seen in the Nasdaq although the equal weight S&P is flat. Sectors are mixed with energy, staples and financials lagging, while tech, consumer discretionary and materials outperform. 

The economy surprisingly lost 23k jobs in July, despite expectations for a 90k increase. Revisions were also marked down lower, with the two month net revisions at -103k, including a 66k drop down in May and a 37k drop down in June. The unemployment rate fell to 4.1% however, albeit alongside a drop in the participation rate. 

The data is driving price action today with Treasury yields lower across the curve, particularly in the front-end with markets dialing back rate hike expectations from the Fed. 

Oil prices are lower but Brent remains above USD 80/bbl with focus still on any updates regarding the Strait of Hormuz. The Iran National Security Spokesperson said a general framework with Oman has been determined and details will be released soon. Note, the details via Fars on Thursday did not appear favourable to the US - given US and Israeli ships were prohibited from using the Strait under the rules. Tensions are also high between the Houthis and Saudi.  

Gold prices are rallying after the aforementioned jobs report. Attention ahead turns to Fed's Barkin and the NY Fed survey of consumer expectations, while next week the highlight will be the US CPI report. 

STOCK SPECIFICS

• Cloudflare (NET): Quarterly earnings and revenue beat expectations
• Airbnb (ABNB): Earnings, revenue and Q3 guidance topped expectations
• Microchip Technology (MCHP): Q1 beat and outlook topped forecasts
• Atlassian (TEAM): Q4 beat and near-term outlook topped forecasts
• ResMed (RMD): FY27 profit outlook missed expectations
• Doximity (DOCS): AI integration builds optimism despite mixed earnings
• The Trade Desk (TTD): Earnings missed with revenue outlook below expectations
• Maplebear (CART): Posted record-high growth
• MP Materials (MP): Revenue beat
• Sweetgreen (SG): Cut guidance amid a multistate Cyclospora outbreak
• DoubleVerify (DV): Nielsen Holdings agreed to acquire the company in an all-cash transaction for ~USD 2.15bln