If you blinked this week, Wall Street probably charged you a fee for the privilege as the markets endure a wild week. September opened with oil flaring, bonds selling off like they had somewhere better to be, and the Federal Reserve’s September meeting turning into a coin flip that kept landing on its edge. By Friday the August jobs report had thrown another log on the fire. The tone was easy enough to summarize: growth still has a pulse, inflation risk is back on the guest list, and nobody wants to sit next to it.
Hot Jobs Revive Rate Fears
The Bureau of Labor Statistics delivered the a wild week’s loudest number on Friday. Employers added 162,000 jobs in August, roughly three times the 55,000 Wall Street had penciled in, while the unemployment rate held at 4.1 percent. Private payrolls rose 127,000, participation climbed to 61.6 percent, and average hourly earnings increased 0.3 percent on the month, or 3.1 percent from a year earlier. July’s original 23,000 decline was revised into a 21,000 gain, and June was lifted as well, so the two prior months together looked 55,000 stronger than first advertised.
That is not the sleepy labor market some Fed officials had been hoping to see before the mid-September FOMC meeting. After Governor Christopher Waller spent Thursday talking markets down from a near-certain hike, futures swung back toward a 60 percent chance of a quarter-point increase. The jobs rebound was real, but it was also a little messy. Food services and local-government education did a lot of the heavy lifting. Still, when the official print triples the forecast, traders do not pause to debate restaurant hours.
Adding To A Wild Week Theme. Oil Climbs on Iran Tension
Crude spent the week reminding everyone that geopolitics still sets the thermostat. Fresh U.S. strikes on targets in Iran and Tehran’s replies, including pressure on shipping through the Strait of Hormuz, sent benchmarks to six-week highs. Brent finished the week near $95 to $96 a barrel, up about 7 percent, while West Texas Intermediate hovered around $91, on track for its strongest weekly gain since mid-July.
Flows through the chokepoint did not collapse, and Iraqi exports even improved after Tehran cleared some tankers. That nuance did not stop the risk premium from doing what risk premiums do. Diesel already looked tight, and higher energy prices are the sort of “transitory” story markets have learned not to trust twice. Vice President JD Vance said Washington would not talk peace until Iran stopped hitting commercial ships. Iran, for its part, did not appear to be shopping for a conference room.
Bond Rout Then Relief Rally
Before Friday’s payrolls, the bond market had already thrown a tantrum befitting a wild week. The U.S. 10-year yield poked around 4.80 percent, its highest since President Trump returned to office. Germany’s 10-year bund yield reached 3.37 percent, a level last seen in 2011. Britain’s 30-year gilt yield printed its highest reading since 1998, and Japan’s 10-year yield finally cleared 3 percent for the first time since 1996. If that list sounds like a museum tour, that is the point.
Thursday offered a brief truce. Waller said August consumer prices, due next week, would heavily influence his September vote and that he could support a hold if inflation kept cooling. Stocks jumped more than 1 percent, with the S&P 500 closing near 7,748. Then Friday’s jobs report yanked hike odds back up. The message from duration traders was simple: oil plus a hotter labor market is not the lullaby they wanted.
Earnings Split as Estimates Rise
Company news refused to pick a mood. Broadcom beat fiscal third-quarter expectations with $29.59 billion in sales and adjusted earnings of $3.32 a share. AI semiconductor revenue tripled to $16.7 billion. Investors still sold the stock after fourth-quarter guidance of $34.8 billion slipped under the $35 billion consensus, proof that in this cycle a near-miss can feel like a foul. Snowflake jumped more than 16 percent on a stronger outlook. Lululemon went the other way, cutting full-year revenue and earnings guidance for a second time and watching the shares drop about 18 percent after North America sales slipped 8 percent capping a wild week.
FactSet’s latest Earnings Insight put a calmer frame around the noise. Analysts raised the S&P 500’s third-quarter bottom-up EPS estimate 1.2 percent between June 30 and August 31, to $89.69 from $88.64, even as oil worries mounted. That is the opposite of the usual early-quarter grind lower; the 20-year average change over those first two months is a 3.1 percent cut. Energy led with an 11.8 percent increase in Q3 estimates, while Materials dropped 9.1 percent. The calendar-2026 EPS tally climbed 6.1 percent to $361.38, and the index’s estimated third-quarter earnings growth now sits at 28.5 percent, up a tick this week on information-technology and energy revisions.
Canada Holds With Hawkish Tone
North of the border, the Bank of Canada left its overnight rate at 2.25 percent for a seventh straight meeting, then sounded less patient than the hold implied. Governor Tiff Macklem said inflation near 3 percent is too high, energy prices are the problem child, and new U.S. tariffs plus Canadian countermeasures have made growth murkier. He also said the bank is prepared to raise rates more than once if prices stay sticky. Markets promptly priced a year-end hike a little more firmly.
U.S. activity surveys told a similar story of demand that has not rolled over. The ISM Manufacturing PMI eased to 54.6 in August from 55.6, still an eighth month of expansion. The Services PMI rose to 55.4 from 54.1, with new orders at 60.9, a multi-year high. Services prices jumped to 72.6. Hiring in services stayed soft, which is how you get a labor market that can print 162,000 jobs and still look uneven. Next week’s CPI will decide whether this was a wild week or the start of a tighter autumn.
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