The Bureau of Labor Statistics reported Friday that total nonfarm payroll employment fell by 23,000 in July, reversing a downwardly revised gain of 20,000 in June and coming in far below Wall Street forecasts that ranged from 83,000 to 95,000 new positions. Government employment drove the bulk of the shortfall, with local government education shedding roughly 50,000 jobs in what economists largely attributed to seasonal adjustment distortions that may be partially reversed in future reports. Private payrolls actually gained 30,000, providing some offset, while average hourly earnings rose just 2 cents on the month, dragging the 12-month wage growth rate down to 3.2%, its lowest since May 2021.
The report landed against the backdrop of a Federal Open Market Committee that last week voted 9-3 to hold its benchmark rate steady, with several members on record favoring a September hike if inflation does not ease. Friday's data substantially reduced the probability of that outcome. The 10-year Treasury yield slipped to 4.651% on Monday, and the dollar index weakened 0.39% to 99.539, below the psychologically important 100 level. The Nasdaq led equity markets higher on Friday, gaining 1.30%, while the S&P 500 added 0.62% to touch 7,758, matching its 52-week high.
Gold moved to its highest level since June 17 on the jobs print before slipping 0.5% Monday morning to approximately $4,322 per ounce as investors took profits. Analysts at KCM Trade described the pullback as 'a natural stabilization rather than a meaningful shift in sentiment,' noting that the metal is expected to remain supported above $4,300 near term. All eyes now shift to the July CPI report due later this week; the June reading came in at 3.5% year-over-year, below consensus, and a second consecutive soft print would materially strengthen the soft-landing narrative.
May and June payroll figures were also revised lower in the BLS release, with the combined downward revision totaling 103,000 jobs, meaning the labor market entered the summer on softer footing than previously understood. For small and mid-sized business operators, the data has two direct implications: wage pressure is easing, which could moderate labor costs in coming months, and the probability of a near-term borrowing-cost increase has declined, giving businesses with floating-rate debt or planned capital expenditure some additional runway.
Spot gold slipped modestly Monday morning to around $4,322 per ounce after reaching its highest level since June 17 on Friday, with investors taking profits while remaining broadly supportive of the metal as rate-hike expectations faded. The U.S. dollar index dropped 0.39% to 99.539, losing the 100 handle, as bond markets priced in a less aggressive Federal Reserve through year-end. Market participants are watching U.S. CPI data due later this week as the next key input for the Fed's September meeting.
Equity markets closed last week with the S&P 500 touching 7,758 and the Nasdaq posting a 1.30% gain as tech stocks rebounded and softer labor data reduced rate-hike fears. The VIX fear gauge eased to 14.9, reflecting calm in options markets even as geopolitical uncertainty over the Strait of Hormuz persists. Fundstrat's Tom Lee has argued the S&P 500 can climb to 8,000 over the coming weeks, a level roughly 3% above Friday's close.
Iran launched a missile strike on an ADNOC oil tanker crossing the Strait of Hormuz on Saturday, marking the 16th such attack since the US-Israel conflict with Iran began in late February. The UAE called the strike a flagrant violation of a UN Security Council resolution protecting freedom of navigation, and Qatar demanded that Iranian attacks cease immediately. Iran's IRGC signaled that any reopening of the strait depends on Washington accepting Tehran's conditions, keeping energy supply uncertainty unresolved heading into the new week.
Energy markets remain on edge as Iran-Oman negotiations over the Strait of Hormuz have stalled, with oil prices set for steep weekly losses last week on the prospect of a deal before the weekend attack reignited supply fears. The strait historically handles roughly 25% of the world's seaborne crude oil trade and 19% of global LNG. Businesses with energy-intensive operations or fuel surcharges built into contracts should monitor developments closely, as any further escalation or unexpected resolution could cause rapid price swings.
Berkshire Hathaway reported second-quarter operating earnings of approximately $13 billion, up 16% year-over-year, as CEO Greg Abel deployed roughly $31 billion into equities during the period, including at least $10 billion into Alphabet, which has displaced Apple as the conglomerate's largest equity holding. The company also spent about $4.5 billion buying back its own shares, its largest quarterly repurchase since 2021. Cash reserves stood at approximately $365.5 billion at quarter-end, down from the $397 billion peak, signaling a clear strategic shift from stockpiling to active capital deployment.
Berkshire Hathaway agreed to acquire homebuilder Taylor Morrison Home Corporation for $6.8 billion in cash, with an enterprise value of approximately $8.5 billion including assumed debt, in what marks Greg Abel's first headline acquisition since assuming the CEO role. The deal places Berkshire inside U.S. residential construction across fourteen states, with heavy concentration in Sun Belt markets, just as mortgage rates have begun easing from two-year highs. Warren Buffett publicly praised Abel's execution of the transaction.
Shopify reported second-quarter 2026 revenue of $3.58 billion, up 34% year-over-year, beating analyst estimates of $3.45 billion, with gross merchandise volume climbing 32% to $115.57 billion, the fifth consecutive quarter of GMV growth above 30%. The company said AI-driven traffic and orders each tripled year-over-year, and its AI assistant Sidekick handled nearly 34 million merchant conversations in the quarter, with daily active merchant usage up 3.6 times. Management guided for low-thirties percentage revenue growth in the third quarter, well above the 26.3% analysts had forecast, lifting shares sharply.
SpaceX shares fell 13.6% following its first post-IPO earnings report, despite the company reporting revenue of approximately $7.8 billion, nearly double the prior year, driven by its Starlink network. Investors focused on $16 billion in quarterly capital expenditures for AI infrastructure, which alarmed markets, while the expiration of the first stock lock-up period added selling pressure from insiders and early investors. The episode illustrates a divide in how markets are currently rewarding AI-adjacent capital spending: demonstrated productivity gains like Shopify's are rewarded, while open-ended infrastructure costs are punished.
The National Federation of Independent Business is scheduled to release its July small business optimism index this week, with the market consensus sitting at 97.8. A miss below that level would reinforce the soft-landing narrative that has been supporting gold and equities. Small business operators surveyed by NFIB have cited labor costs, inflation, and uncertainty over interest rates as their primary concerns through mid-2026, and the July jobs shock may shift some of that sentiment as wage growth has now decelerated to 3.2%.
Average hourly earnings grew just 3.2% over the 12 months through July, the slowest pace since May 2021 and below the 3.5% consensus forecast, according to the Bureau of Labor Statistics. That moderation, combined with an overall decline in payroll growth, offers small and mid-sized businesses in labor-intensive sectors their first meaningful easing in compensation pressure in over a year. The caveat is that the data also reflects a slowing economy, and operators should distinguish between cost relief from moderating wages and a demand-side slowdown that may reduce revenue alongside expenses.
The immediate borrowing-cost threat has receded. Friday's jobs report was weak enough to take a September Fed rate hike largely off the table, and that matters for any business carrying a floating-rate line of credit, planning a capital equipment purchase on financing, or considering refinancing. The 10-year yield at 4.651% is still elevated by historical standards, but the direction has shifted downward. Operators should keep an eye on the July CPI print later this week: if it confirms another below-consensus inflation reading, lenders may begin to price in cuts, making this a reasonable window to lock in fixed rates before conditions change again.
Energy and logistics costs face a wildcard. The Strait of Hormuz situation is not resolved, and the weekend missile strike on a UAE oil tanker was a deliberate provocation, not a stray incident. Businesses with diesel-intensive supply chains, freight contracts, or energy-price clauses in customer agreements should review their exposure now. On the labor side, the wage growth deceleration to 3.2% annually is real, but operators should benchmark carefully: if your sector was already paying above-market rates to compete, the aggregate slowdown may not be visible at the firm level.