Strong Jobs Data Pressures Stocks as Rate Hike Risk Rises

Stocks are pulling back, with the S&P 500 Index (SPX) down about 0.4% after stronger jobs data increased the possibility of higher interest rates. The larger conflict is that economic strength is good for growth, but it can also push Treasury yields higher and pressure stocks, precious metals, and Bitcoin.

The economy added 162,000 jobs, beating estimates by 109,000, and previous months were revised higher. That would normally sound positive, but the market is focused on what it means for the Federal Reserve. The stronger the economy remains, the more room the Fed has to raise rates at its September 16 meeting.

Even with today’s decline, I remain bullish on the S&P 500 because it is still above its main support trend line. The key level is around 7,570. As long as the index stays above that level, the broader structure remains bullish. A break below 7,570 would move the market into a neutral zone, while a break below the lower trend line could lead to a much larger sell-off.

The president also demanded that the Fed lower rates and threatened to cancel trade contracts with countries where the United States does not have a surplus. I see that as possible pressure on the Fed to hold rates steady instead of raising them. A rate cut appears unlikely because it could damage the Fed’s credibility, but unchanged rates remain possible if inflation cooperates.

The U.S. Dollar Index (DXY) bounced slightly after two major declines, which makes sense as expectations for higher rates increase. Still, the bounce was limited, and the dollar remains below its broken trend line. As long as it stays below that line, the broader pressure remains pointed lower.

The U.S. 10 Year Treasury Yield (US10Y) is also holding below an important double-top resistance area. If that resistance continues to hold, the technical setup favors a pullback in yields, which would ease pressure on stocks, gold, silver, and Bitcoin.

That makes next week’s Consumer Price Index and Producer Price Index reports especially important. Tame inflation would give the Fed room to leave rates unchanged. Strong inflation would increase the pressure to raise rates and could create another round of selling across risk assets.

Gold Futures (GC) pulled back as yields moved higher. Gold previously reached resistance just under $4,700, declined to technical support, and then bounced. It is now sitting between those levels without a clear long or short setup, so I would remain patient.

Silver Futures (SI) has a similar structure. It reached resistance, pulled back, and found support at a major trend line. Staying above that line supports a positive bias. A break below it could lead to a much sharper decline toward the lower trend line.

West Texas Intermediate Crude Oil Futures (CL) finished roughly flat to slightly lower after being much weaker earlier in the session. Some buyers returned before the three-day weekend because traders did not want to remain heavily short while the market was closed and geopolitical escalation remained possible.

I still believe oil is likely to pull back after reaching short-term resistance. The main area I am watching is between $83 and $84 per barrel. If oil instead moves above $95 and toward $100, it would increase inflation pressure, push interest rates higher, and place even more stress on consumers.

Natural Gas Futures (NG) remains above its pivot line, so I remain bullish. It posted a small gain after pulling back on inventory data during the previous session. The upward trend remains intact as cooler months approach and seasonal demand becomes more important.

Tesla, Inc. (TSLA) reversed its previous gain after regulators raised concerns that its robotaxis may not satisfy required standards because they do not have steering wheels. The stock gave back the entire previous move and fell even further. Tesla remains in a short-term uptrend, but it is still trading inside a larger parallel channel. The lower boundary has repeatedly created buying opportunities, while the upper boundary has repeatedly created short opportunities. That setup remains valid until price breaks through either side, which is why tight stops matter.

Apple Inc. (AAPL) also declined after a solid advance but did not reach the open gap above, where stronger resistance remains. Volume was relatively light before the three-day weekend. The return of institutional participation in September should give us a clearer picture of whether the rally can continue.

Bitcoin (BTC) pulled back but remains directly beneath major resistance. The key level is $82,000. A confirmed break above $82,000 could open a path toward $90,000 or higher, but until that happens, I am respecting resistance. Bitcoin has shown impressive relative strength, especially after the previous session’s surge, but holding beneath resistance is not the same as breaking through it.

For now, I am watching 7,570 on the S&P 500, resistance on the 10 Year Treasury Yield, oil between $83 and $84, and $82,000 on Bitcoin. Let price confirm the next move before committing to it.