U.S. payrolls rose by 162,000 in August, while the prior two months were revised up by a combined 55,000. That eased concerns that the economic slowdown would deepen. But alongside expensive oil, strong employment makes the Fed's fight against inflation more difficult. Good economic news was not equally good news for stocks: the S&P 500 fell 0.4% on Friday, while the U.S. 10-year Treasury yield rose to 4.78%.

Within technology, semiconductors and software moved in opposite directions. The semiconductor ETF $SMH gained 2.61% for the day, while the software companies ETF $IGV fell 2.23%. That gap is a reminder that AI spending does not benefit every technology company equally. For the rally in semiconductors to broaden, software stocks also need to recover; next week's inflation data will show whether this divergence persists under rate pressure.

What changed since yesterday?

In yesterday's note, we were waiting for the jobs report and viewed software joining the recovery as a positive. We now have the official data, and IGV is back below $106. SMH rose from its previous close of $552.60 to $567.01. That means we need to reassess both the expectation of weak employment and the view that the recovery was spreading across technology. Friday's close showed that buying in semiconductors was not matched by software.

Key takeaways

  • Strong jobs data alone does not mean the Fed will raise rates. It should be read alongside wages and energy costs; August inflation will be the Fed's second major test.
  • The Nasdaq 100 ETF $QQQ rose just 0.18%. Despite semiconductors' sharp gain, the index's muted response makes it more important to watch how many sectors are participating in the rise.
  • U.S. stock markets are closed on Monday for Labor Day. If oil or sanctions news breaks over the weekend, stocks' first broad reaction will come on Tuesday.

What happened?

  • According to the U.S. Bureau of Labor Statistics, the unemployment rate held at 4.1%; hourly earnings rose 0.3% month over month and 3.1% year over year. Food services and drinking places, along with education jobs in local government, led the employment gains. Job losses in the information sector show that labor demand is not the same across every area.
  • Brent crude closed at $96.28 and finished the week up 9.2%. Limited shipping through the Strait of Hormuz keeps uncertainty over energy supplies alive. As long as oil remains expensive, the pass-through from transportation and production costs into inflation becomes more important.
  • The U.S. Treasury placed Türkiye-based Golden Global Yatırım Bankası and two affiliated entities on the sanctions list. The department alleges that the institutions facilitated Iran-linked financing. For Türkiye, the significance lies in the effect on cross-border payments and banks' transaction controls; the entire banking sector should not be treated as falling under the same scope.

Market levels

Indexes and semiconductors

  • The S&P 500 closed at 7,718.60, near the 7,700 support zone. Holding this area could limit the pullback; a break above 7,750 would suggest that buyers are regaining strength.
  • QQQ closed at $718.96, just below the $720 resistance zone. It moved above that threshold intraday but did not close above it. A sustained move above it would make semiconductor buying a stronger support for the index; $712 is the support level below.
  • For SMH, the $563-$572 range flagged by Tunç Şatıroğlu (@tuncsatiroglu) is meaningful. The close is above the first level but below the second. Holding $563 as support is important for the move to continue; a break through resistance at $572 would provide stronger confirmation of the rally.
  • NVIDIA ($NVDA) rose 0.84% to $230.36. The day's high of $234.76 may act as resistance. If it cannot find support at $225, the strength of the latest rise comes into question.

Software and precious metals

  • IGV fell to $104.57. The day's low of $104.36 can be watched as support; a break below it would show that selling is continuing. The first condition for a recovery is a move back above $106; $108 resistance comes next.
  • The gold ETF $GLD fell 0.84% to $406.77. The previous day's low of $408.54 now sits above as resistance. Failure to find support at $403.96 increases the risk of a deeper pullback.
  • The silver ETF $SLV fell 1.21% to $59.82. If buyers regain strength, the first level they will meet is resistance at Friday's high of $59.97. Below, the day's low of about $59.13 may provide support. These are ETF prices and are not on the same scale as spot gold and silver.

Treasury yields

  • The U.S. 10-year Treasury yield faces nearby resistance at 4.80%; 4.60% is a support zone. A move toward 4.90% could put further pressure on the valuations of companies priced on the basis of future earnings expectations.

Red flags

  • If software continues to fall while semiconductors rise, it means a small number of groups are carrying the technology index. If the leading stocks see profit-taking, this narrow participation would leave the index more fragile.
  • A simultaneous rise in oil and Treasury yields puts both cost and valuation pressure on companies. Demand support from strong employment may not offset both burdens across every sector.

Calendar

  • September 7: U.S. Labor Day; stock markets are closed.
  • September 10, 3:30 p.m. TRT: U.S. August Producer Price Index (PPI). We will see how producer costs changed.
  • September 11, 3:30 p.m. TRT: U.S. August Consumer Price Index (CPI) and real earnings. We will watch how energy pressure is passing through to consumer prices.
  • September 15-16: Fed rate meeting. Jobs and inflation data will be assessed together.

My analysis

I read Friday's session as evidence that economic strength and stock prices are not the same thing. The increase in employment points to resilient demand, but a single month of data does not eliminate recession risk. With energy costs high, the Fed's room to maneuver is narrowing. If inflation cools, strong employment could be more welcome as a source of support for corporate earnings. If price pressure persists, the same data will support continued tight monetary policy.

For that reason, I do not see the buying in semiconductors as a shift that has spread across all of technology. A renewed contribution from software and the index holding above resistance would show that more companies are carrying the rise. I also do not conclude from the day's drop in metals that the need for long-term protection has ended. Geopolitical risk and rate pressure can operate at the same time; the price action that follows will show which force is stronger.

Next week, I will focus less on revisiting employment and more on how bonds and stocks move together after the inflation data. If rate pressure eases while software recovers, semiconductor leadership should broaden. If oil stays expensive and Treasury yields rise, it is too early to treat a limited gain in the index as a strong market signal.

Sources

  • U.S. Bureau of Labor Statistics, August employment report: bls.gov
  • BLS, September data calendar: bls.gov
  • Federal Reserve, meeting calendar: federalreserve.gov
  • U.S. Treasury, September 4 sanctions decision: home.treasury.gov
  • Associated Press, Friday's closes and holiday calendar: apnews.com
  • Reuters / gCaptain, Strait of Hormuz shipping traffic: gcaptain.com
  • Market data, September 4 ETF and NVIDIA closes: alpaca.markets
  • Kanal Finans, Tunç Şatıroğlu, pre-data Nasdaq analysis: youtu.be

This is not investment advice; it is a research and monitoring note.