• Markets close higher following jobs report – U.S. equity markets ended higher on Friday, with the S&P 500 reaching a record high. The July jobs report showed an unexpected decline in payrolls, although the unemployment rate also moved slightly lower. Investors appeared to focus on the report’s softer wage and hiring trends, which may help reduce inflationary pressure and give the Fed less urgency to hike interest rates. Bond yields declined, with the 10-year U.S. Treasury yield near 4.64%. In international markets, Asia finished mixed overnight, while Europe traded higher. In energy markets, WTI oil prices edged down near $77 per barrel amid reports that Iran and Oman are nearing an agreement that could reduce disruptions in the Strait of Hormuz. The U.S. dollar was weakened modestly against major currencies, consistent with the decline in Treasury yields.
   
• Economy loses jobs in July but unemployment edges lower – Total nonfarm payrolls declined by 23,000 in July, well below forecasts for a gain of 95,000 and the average monthly increase of 34,000 over the past 12 months. The largest contributors to the drop were local government education (-50,000), leisure and hospitality (-40,000) and retail trade (-19,000). Payroll figures for May and June were also revised lower by a combined 103,000, indicating hiring slowed more than previously reported. Despite July's job losses, the unemployment rate edged down to 4.1%, compared with expectations that it would hold steady at 4.2%, driven by a further reduction in the labor-force participation rate. Average hourly earnings increased 3.2% from a year earlier, below estimates calling for a 3.5% rise, which could help ease inflationary pressure. The broader labor market appears to be cooling but still roughly balanced, in our view. Approximately 7.4 million job openings continue to exceed the 6.9 million unemployed workers, which should help support household incomes, consumer spending and the broader economy. The report could keep the Fed on track to hike; however, there may be somewhat less urgency now, in our view, with the timing likely dependent on incoming inflation and employment data over the months ahead.
   
• Strong earnings season approaches the home stretch – With 88% of S&P 500 companies having reported earnings, results have been considerably stronger than expected. About 86% have beaten analyst estimates by an average upside surprise of 29%. As a result, forecasts for second-quarter earnings growth have been revised sharply higher to 48%, more than double the 22% estimate at the end of the quarter. Energy companies are posting the strongest growth — supported by higher oil prices during the quarter — followed by the communications and consumer discretionary Earnings gains have also been broad-based, with 10 of the 11 sectors reporting year-over-year increases. We believe wider participation could help make the market's advance more durable by reducing its reliance on a small group of mega-cap companies. It could also help create a more favorable backdrop for diversified portfolios. We continue to recommend overweight positions in U.S. large- and mid-cap stocks, as well as emerging-market equities, which we think stand to benefit from their exposure to tech innovation and related infrastructure buildout. We expect U.S. stocks to benefit from the relative strength of the U.S. economy, supported by a steady labor market and consumer spending.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet.}

• Stocks close mostly lower ahead of Friday's payroll report – U.S. equity markets finished mostly lower Thursday, with the S&P 500 logging a modest 0.2% decline as investors await Friday’s July nonfarm payrolls report. Geopolitical developments also remained in focus amid continued reports of progress toward an agreement that could help reopen the Strait of Hormuz, although important details surrounding its implementation remained unclear. The absence of a finalized agreement likely contributed to upward pressure on oil prices, with WTI crude rising roughly 3.6% on the day. On the economic front, initial jobless claims remained low at 199,000 last week, highlighting limited layoff activity, while second-quarter labor productivity exceeded expectations. In bond markets, the 10-year U.S. Treasury yield edged higher to around 4.66%, while the 2-year yield rose to approximately 4.25%.
   
• Jobless claims remain low, signaling stable labor-market conditions – A busy week of labor-market data continued this morning, with initial jobless claims totaling 199,000 last week, little changed from the prior week’s revised reading of 198,000. In 2026, weekly jobless claims have averaged roughly 211,000, well below their 30-year average of more than 300,000 and indicative of historically low layoff activity. This morning also brought the Challenger Job-Cut Report for July, which tracks layoffs announced by U.S.-based employers. Announced job cuts fell to 33,429 in July from 45,849 in June and were 46% lower than a year earlier. The July total was also the lowest in two years. While layoffs remain limited, we've also seen decent hiring trends this year. Yesterday’s ADP employment report showed that U.S. private employers added 44,000 jobs in July, down from a revised 95,000 in June but still representing stable hiring trends, in our view. Meanwhile, the ISM manufacturing employment index rose to its highest level since August 2022 and moved into expansion territory for the first time in 33 months, perhaps signaling some improvement in manufacturing employment. However, this was partially offset by a decline in the ISM services employment index, which fell into contraction territory in July. Overall, we would characterize U.S. labor-market conditions as healthy, with low levels of layoffs paired with a moderate pace of hiring. We expect stable labor-market conditions to remain supportive of the U.S. economy and consumer spending over the remainder of the year. Labor-market data will remain in focus tomorrow with the release of the July nonfarm payrolls report.
   
• Labor productivity improves in the second quarter – Improving labor productivity has supported the U.S. economy in recent years. This morning’s preliminary report for the second quarter showed that nonfarm business labor productivity increased at a 1.4% annualized rate, exceeding expectations for a 0.7% gain and above the first-quarter reading of 0.8%. Since 2023, labor productivity has grown at an annualized rate of roughly 2.5%, well above the approximately 1.2% average recorded from 2010 through 2019. Stronger labor productivity can benefit the economy by allowing output to grow without a commensurate increase in labor costs, thereby helping to ease inflationary pressures. This dynamic is reflected in unit labor costs, which measure the labor compensation required to produce one unit of output. Unit labor costs increased at a 1.3% annualized rate in the second quarter, below expectations for a 2.2% increase. The relatively modest increase may provide some evidence of easing cost pressures and help reduce the urgency for additional Federal Reserve interest-rate hikes, particularly if inflation data over the next several months show a similar trend. With labor-force growth slowing, we believe sustained productivity gains could play an increasingly important role in supporting U.S. economic growth in the coming years.

Brock Weimer, CFA;
Investment Strategy

^{Source for all data: FactSet.}

• Stocks finish mixed with earnings and geopolitics in focus – U.S. equity markets finished mixed on Wednesday as investors digested another busy day of corporate earnings, including results from Advanced Micro Devices and SpaceX’s first quarterly filing as a public company. Geopolitical developments also remain front and center, with reports suggesting that an interim agreement to reopen the Strait of Hormuz could be announced as soon as later today. The tech-heavy Nasdaq underperformed, declining approximately 0.8%, while the S&P 500 posted a 0.2% loss and the Dow gained 0.5%. On the economic front, the ADP employment report showed that private employers added 44,000 jobs in July, the smallest monthly gain in six months but still consistent with stable hiring trends, in our view. In addition, the ISM Services PMI edged higher to 54.1 in July. Combined with Monday’s ISM Manufacturing PMI reading of 55.6, the data signal continued momentum across both the goods-producing and services sectors of the U.S. economy. Bond yields finished the day little changed, with the 10-year Treasury yield closing at 4.61% and the 2-year yield at 4.18%.
   
• ADP employment data points to job growth in July – The ADP employment report showed that private employers added 44,000 jobs in July, below economists’ expectations for a gain of 75,000 but still consistent with stable employment growth, in our view. Looking beneath the headline, employment in goods-producing sectors declined slightly, while the service-providing sector accounted for all of the month’s job gains. The report also showed that median pay for employees who remained in their current jobs rose 4.4% year-over-year, unchanged from June. Meanwhile, pay growth for job changers accelerated to 7%, its fastest pace since August 2025. While stronger wage growth should help support household finances and consumer spending, it could also raise concerns at the Federal Reserve that a sustained period of elevated wage growth may place upward pressure on inflation. In our view, today’s data provide further evidence of stable labor-market conditions, characterized by modest hiring and low levels of layoffs. We think the report also provides a decent handoff to Friday’s nonfarm-payrolls report, with economists expecting employment to rise by 100,000 and the unemployment rate to remain unchanged at 4.2%.
   
• Earnings season remains in focus – Earnings season remains in focus on Wednesday as investors digest results from semiconductor company Advanced Micro Devices (AMD) and SpaceX’s first quarterly filing as a public company. AMD reported stronger-than-expected revenue and earnings for the second quarter, driven by continued strength in the company’s Data Center segment, which continues to benefit from the buildout of AI-related infrastructure. Despite the better-than-expected results, AMD shares traded lower, likely reflecting elevated expectations heading into the quarter and some profit-taking after the stock gained more than 140% year-to-date through Tuesday, in our view. SpaceX shares are also trading lower after the company reported better-than-expected revenue and a narrower-than-expected second-quarter loss following Tuesday’s market close. However, the company announced second-quarter capital expenditures of $18.4 billion, primarily related to investments in AI compute infrastructure. That figure was well above analysts’ estimates of approximately $13.2 billion for the quarter, and we would view the negative stock-price reaction as reflecting investor caution around increased AI-related spending without tangible returns. At the index level, second-quarter results have been strong, with S&P 500 earnings per share on pace to grow 45% from a year ago. If that pace holds, it would mark the seventh consecutive quarter of double-digit earnings growth. The full-year earnings outlook also remains solid, with estimates calling for S&P 500 earnings growth of nearly 30%. We continue to view the fundamental environment as supportive of equity markets. Strong corporate profit growth, healthy economic activity, and stable labor-market conditions should help provide a favorable backdrop over the coming months, in our view.

Brock Weimer, CFA;
Investment Strategy

^{Source for all data: FactSet.}

• Markets close higher as oil prices fall further – U.S. equity markets ended sharply higher on Tuesday, with the S&P 500 and Dow Jones Industrial average reaching record highs. Oil prices were down near $76 per barrel following comments by U.S. Treasury Secretary Scott Bessent that a deal to open the Strait of Hormuz could be reached soon. Bond yields also moved lower, with the 10-year U.S. Treasury yield near 4.62%. In international markets, Asia finished mixed overnight, while Europe closed higher. The U.S. dollar weakened modestly versus major currencies, consistent with the decline in Treasury yields.
   
• Job openings in line with estimates – Job openings declined to 7.4 million in June, in line with estimates and down from 7.6 million in May. The number of people voluntarily leaving their jobs (quits) held steady at 3.2 million, typically indicating confidence in employment prospects. Job openings continue to exceed the 7.1 million unemployed workers. Together, these figures point to a healthy labor market, which should be supportive of consumer spending and the broader economy, in our view. Total nonfarm payrolls will provide a deeper look at the labor market on Friday, with forecasts calling for 100,000 jobs created in July, up from 57,000 in May. The unemployment rate is expected to hold steady at 4.2%.
   
• Manufacturing activity below expectations – New orders for manufactured goods dipped for the second consecutive month in June, down 0.3% from May and below forecasts pointing to a 0.2% increase. Orders for durable goods were 0.5% higher month-over-month, ahead of estimates for a 0.3% increase. Unfilled orders rose 0.6% to $1.6 trillion, indicating a large order backlog that could reflect stronger demand than the headline figure implies, in our view. We also expect AI infrastructure buildout to help support continued strong business investment.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet.} 

• Stocks trade higher to start the week – U.S. equities traded higher on Monday, with declining oil prices and lower bond yields supporting investor sentiment. Over the weekend, President Trump announced that he would hold off on planned attacks against Iran while pursuing a diplomatic solution. The announcement sent WTI crude oil down approximately 5% to around $80 per barrel and pushed the 10-year U.S. Treasury yield below 4.7%. From a leadership standpoint, cyclical and growth-oriented segments of the market outperformed, with consumer discretionary and communication services among the top-performing sectors in the S&P 500. On the economic front, the ISM Manufacturing PMI rose to its highest level since May 2022, signaling continued improvement in the goods-producing side of the economy. Looking ahead, corporate earnings will remain in focus this week, with more than 100 S&P 500 companies scheduled to report. Labor market data will also be key, headlined by Friday’s nonfarm payrolls report.
   
• Labor-market data and corporate earnings in focus for the week ahead – Investors face a full week of corporate earnings and labor market data that will help set the tone for the week ahead. June JOLTS job openings are due tomorrow, followed by the ADP employment report and Friday’s release of July nonfarm payrolls and the unemployment rate. We have seen signs of stabilization in the labor market, with nonfarm employment growing by an average of 92,000 jobs per month through June, an improvement from average monthly employment growth of roughly 10,000 in 2025. In addition, signs of layoffs remain limited, with the unemployment rate at 4.2% and initial jobless claims averaging just 211,000 per week this year. Labor supply and demand also appear fairly balanced, in our view, as evidenced by job openings slightly exceeding the number of unemployed people.
  
  On the corporate front, more than 100 S&P 500 companies will report earnings this week, and second-quarter results have been strong among those that have already reported. Roughly 61% of S&P 500 companies have reported thus far, with 86% exceeding analysts’ earnings expectations. In addition, second-quarter earnings are on pace to grow by nearly 45% year over year, led by the technology, communication services, consumer discretionary, and energy sectors, each of which is on pace to deliver earnings growth of more than 65%. While a portion of the robust second-quarter earnings growth is attributable to nonrecurring items at a handful of large technology companies that benefited from investment-related gains, earnings strength has not been limited solely to large-cap technology companies. The Russell Midcap Index is also on pace to deliver earnings growth of more than 20% in the second quarter. We continue to believe the backdrop remains supportive for equity markets over the coming months, underpinned by strong profit growth, healthy economic activity, and stable labor market conditions.
   
• How do stocks perform around Midterm elections? – Markets have had their fair share of policy changes to contend with over the past year, and policy implications will remain in focus as the November midterm elections approach. However, while policy headlines can be noisy, history suggests it is best not to play politics with your portfolio. Since 1970, the S&P 500 has generated an average total return of 3.1% in the three months leading up to Election Day, with positive returns in nine of 14 midterm election years, or 64%.* In the three months following Election Day, the S&P 500 generated an average total return of 7.6%, with positive returns in 12 of 14 periods, or 86%.* While there is no guarantee that this historical pattern will repeat in 2026, we believe the data highlight the importance of maintaining a long-term investment strategy aligned with your financial goals rather than allowing political developments to drive portfolio decisions.

Brock Weimer, CFA;
Investment Strategy

^{Special thanks to our summer intern, Owen Apfel, for his assistance with data collection.
Source for all data not cited: FactSet.  
Source for data cited: *FactSet, Edward Jones}