S&P 500 Rallies as Weak Jobs Data Eases Rate Hike Fears

The S&P 500 Index (SPX) is rallying as weaker jobs data pushes Treasury yields lower and eases expectations for further Federal Reserve rate increases. The opportunity is a continued stock market rebound, but that depends on yields retreating and important chart levels holding.

Data as of: Friday, before the market open.

In One Minute

Stocks are up about 1% before the opening bell, with S&P 500 Index Futures (ES) approaching 7,800. Hiring and wage growth missed expectations, making an October rate increase less likely and leaving December closer to an even split. I’m keeping a bullish bias toward 8,000 while the daily chart holds above its neutral zone. The most important confirmation comes from Treasury yields: their weekly reversal needs to hold through Friday’s close.

The Setup

The U.S. 10 Year Treasury Note Yield (TNX) is at 5.174%, below 5.2%, after reaching 5.3% in the previous session. Yields repeatedly pushed above the 2007 high without confirming a sustained breakout.

That failed breakout matters. The weekly chart has a long upper wick near the highs from 2006 and 2007, showing that the move above resistance did not hold. If that candle remains intact at Friday’s close, it strengthens the case for lower yields and further stock market gains.

The S&P 500 remains above its daily neutral zone, with about 8,000 as the target near its upper ascending trend line. The S&P 500 Equal Weight Index (SPXEW) has substantially underperformed and looks due for a bounce. The U.S. dollar (USD) is also pulling back after a strong advance.

What Changed

Nonfarm payrolls increased by 29,000 against a forecast of 89,000. Unemployment rose to 4.2% from 4.1%, and hourly earnings increased 0.1%, below the expected 0.3%.

The economy is still adding jobs, but the slower pace reduces pressure on the Fed to raise rates. An October increase is no longer favored, while December expectations are closer to an even split. Upcoming inflation and economic reports can still change that outlook. Futures were already higher before the release and accelerated afterward. With less than 30 minutes before the opening bell, stocks were up about 1%.

Yesterday, the S&P 500 fell sharply early, then recovered to close up 0.2% as yields reversed lower. The timing raises suspicion that some investors anticipated the weak report, but it does not prove an information leak. My actionable signal remains the bullish chart structure.

Energy and industrial commodities

Crude Oil (CL) is down more than 3.5% on the possibility that France releases up to 50 million barrels from its strategic reserve. Oil is holding an ascending trend line connecting several previous lows, just below $89 a barrel at about $88.80. A close below $88.80 would open the way toward $78.77. I expect that lower level could be tested by the midterm elections, roughly a month away, as efforts to bring prices down intensify ahead of the vote.

Natural Gas (NG) initially fell after breaking a key trend line yesterday. I remain long, slightly below my entry price, and continue accumulating. The immediate test is whether spot natural gas can reclaim $2.85; it is currently about $0.01 away. Recovering that level would improve the setup, while failure to regain it leaves the breakdown unresolved. Copper (HG) remains a bearish setup. My short position is comfortably profitable, and I still expect further downside. Employment losses would add to concerns about industrial demand.

Gold (GC) jumped as yields fell, then pulled back modestly on its 10-minute chart. Its broader ascending support line, extending back to May 2025, remains intact after repeated tests. I’m respecting that support, but I want a stronger bounce. A decline followed by narrow sideways trading can become a bear flag, suggesting another move lower. If gold is still drifting along support by the middle of next week, that risk becomes more concerning.

Silver (SI) is also sitting just above its technical trend line. A few uneven candles do not establish a mature bear flag, so I’m giving support the benefit of the doubt while watching how the recovery develops.

Silver has greater industrial exposure than gold, making it more vulnerable to a deeper slowdown. Artificial intelligence spending could keep economic activity strong and allow silver to move substantially higher in the near term. The longer cycle outlook points toward a 100-year cycle around 2029 and 2030, but the immediate economic direction remains uncertain. Outright job losses would make me more cautious about both silver and copper.

Seagate Technology Holdings plc (STX) and Western Digital Corporation (WDC) are falling sharply as expanded production raises concerns about greater supply and lower prices. These are storage businesses; Micron Technology, Inc. (MU) operates in memory. The production expansion appears to involve Toshiba Corporation (former ticker: 6502). The same supply pressure could eventually affect memory pricing as well.

For Seagate, I’m watching $800, where a gap fill meets an ascending trend line. Returning to an earlier price gap at the same place as trend line support makes this a potential short-term trading area if price reaches it today. Western Digital has a similar selloff, with a potential gap fill around $411.

Baidu, Inc. (BIDU) is near $85, where a descending parallel channel meets horizontal support. Price is briefly moving through that area today, and I remain a buyer around this zone. Alibaba Group Holding Limited (BABA) is also part of the broader Chinese technology recovery opportunity.

The Hang Seng Index (HSI) may be developing a large inverse head and shoulders pattern, which could signal a reversal of its decline. It is early, and I need to see the index turn higher over the coming days. The Hong Kong dollar (HKD) is tied to the U.S. dollar, making dollar strength a headwind for Hong Kong markets. A weaker U.S. dollar would support the recovery outlook. Chinese markets also look lightly invested compared with their own historical participation.

NIKE, Inc. (NKE) beat earnings expectations but missed revenue estimates and lowered guidance. Earnings per share were $0.48 against $0.44 expected, a $0.04 beat. Revenue was $11.21 billion against $11.32 billion expected. Guidance fell to $1.15 to $1.35, compared with the previously expected $1.69.

Nike dropped to $31.35 before rebounding, but remains down about 8% from yesterday’s close. I remain long and added during the decline after earnings. This is a turnaround position, not an expectation of making 30% tomorrow.

Sentiment among analysts and on social media is deeply negative, which supports my contrarian accumulation approach. U.S. revenue exceeded expectations, while China revenue was weak. A Chinese economic recovery could help Nike recover as well.

Yesterday’s trading deserves attention. Nike rose gradually, then reversed around 3:00 PM and lost more than $1, or over 3%, in the final hour. Earlier 10-minute candles traded 45,000 and 70,000 shares; later readings included 682,000, 1.4 million, and 1.04 million shares. That sudden selling raises suspicion about advance knowledge, but does not establish a leak.

Support is around $32, with historical chart areas extending back to 2012 and 2013. A further decline toward $28 to $29 remains possible, with $28 the next major support.

Bank of America Corporation (BAC) was my swing purchase yesterday after financial stocks had been heavily sold. The setup rests on beaten-down quality companies participating in a rebound as yields retreat.

Digital Assets and Crypto

Bitcoin (BTC) is moving modestly higher as a bullish near-term pattern tries to develop. Resistance is around $89,000, along an ascending trend line associated with an earlier bear flag. That earlier sequence involved a sharp decline, a contained recovery, and another breakdown.

Bitcoin has already been rejected at this line once. Another test needs to produce a breakout; otherwise, rejection could lead to a larger pullback. I slightly favor an upward move, but the potential reward is not attractive enough for a new swing trade. I currently have no long or short swing position, while longer-term ownership remains intact.

I traded the earlier breakout when Bitcoin was in the $60,000 range. Now I’m waiting for another high-quality setup rather than buying simply because price is rising.

Why It Matters

Slower hiring is helping stocks because it reduces the immediate pressure for higher rates. Lower yields are also supporting gold, but silver and copper face a separate risk if slower growth turns into falling industrial demand.

Company conditions still matter. Nike needs a business turnaround, while storage stocks face supply and pricing pressure. A broad market rally does not remove those risks.

Volume also determines how much weight I give a move. Stocks can trade from 4:00 AM, but thin overnight activity often provides weaker signals. Heavy earnings-related volume deserves attention; trading throughout the weekday becomes more useful as participation increases.

Key Levels

The central relationship is still yields versus stocks. A confirmed yield reversal supports the S&P 500’s path toward 8,000, while oil’s $88.80 support test determines whether its lower target comes into play.

Bull Case

The S&P 500 stays above its neutral zone as Treasury yields retreat. Gold and silver produce stronger rebounds from their trend lines, and natural gas recaptures $2.85.

A weaker dollar helps the Hang Seng turn higher and strengthens the Chinese equity recovery setup. Improving conditions in China could also help Nike’s turnaround. Bitcoin clears $89,000 rather than repeating its earlier rejection.

Bear Case

Gold and silver continue moving sideways after their declines and develop mature bear flags. Negative jobs numbers increase demand concerns for silver and copper.

Oil closes below $88.80, opening the path toward $78.77. Natural gas fails to reclaim its broken trend line, Nike moves toward $28 to $29, and expanded production continues pressuring storage and potentially memory prices.

Bitcoin meets resistance near $89,000 again and pulls back more sharply.

What to Watch Next

Watch Friday’s Treasury yield close first. Then follow upcoming inflation and economic reports for changes to October and December rate expectations.

For commodities, watch oil’s daily close, natural gas’s recovery attempt, and whether gold produces a stronger bounce by the middle of next week. For equities, watch Seagate at $800, Western Digital at $411, Baidu around $85, and the Hang Seng’s ability to turn higher over the coming days. Bitcoin’s next $89,000 test remains its key confirmation.

Bottom Line

The stock rally depends most on whether lower yields hold and the S&P 500 preserves its bullish structure. Keep that relationship in focus, but respect the separate support tests and company risks elsewhere. Let price reach the level and confirm the setup before committing.