Strong Jobs Data Pressures Stocks as Treasury Yields Test Key Resistance

S&P 500 Index Futures (ES) are pulling back after a much stronger-than-expected jobs report increased the probability of a Federal Reserve rate hike in September. The bigger relationship to watch now is Treasury yields, because whether the U.S. 10 Year Treasury Yield (US10Y) breaks above 4.8% to 4.81% could determine whether stocks, gold, and Bitcoin can hold their recent strength.

The economy added 162,000 jobs in August versus expectations for 53,000, a beat of 109,000. June and July were also revised higher by a combined 55,000 jobs. Unemployment stayed at 4.1%, labor force participation increased slightly, hourly earnings rose 0.3%, and wages were up 3.1% from a year earlier. Economically, this was a strong report, but markets are focused on what it means for interest rates.

Before the report, markets were pricing a 52.4% probability of a September rate hike versus 47.6% for no hike. After the report, the probability of a hike increased to 58%. That is higher, but it is still not overwhelming. The Consumer Price Index and Producer Price Index reports next week could matter even more. Softer inflation would give the Federal Reserve more room to leave rates unchanged.

The S&P 500 Index (SPX) is still holding its broader bullish structure. The selling after the jobs report is only giving back part of the previous day's strong rally. The important support level is around 7,570. As long as the index stays above that level, I would maintain a bullish bias, with resistance around 7,900. Below 7,570, the market moves into a more neutral area. A break below the lower rising trend line near 7,400 would be the more serious technical deterioration.

Treasury yields are still the key. The U.S. 10 Year Treasury Yield tested the same resistance area from January 2025 at 4.8% to 4.81% and began pulling back again. If that level holds, stocks should have room to remain relatively strong. If yields break above 4.8%, the next move could be toward 5%, and that would be much harder for the market to absorb. The U.S. Dollar Index (DXY) is also strengthening as expectations for higher rates increase.

In commodities, West Texas Intermediate Crude Oil Futures (CL) are down about 1.5% after reaching short-term resistance. The technical setup leaves room for a retracement toward approximately $83 per barrel, which would bring oil back toward the previous breakout area. Natural Gas Futures (NG) remain above an important pivot despite a larger-than-expected inventory build. The upside level remains around $3.30, with winter demand, European shortages, and data center use supporting the broader setup.

Gold Futures (GC) are pulling back sharply because yields are higher and the dollar is stronger. There is no clear setup right now, so patience makes more sense than forcing a trade. Silver Futures (SI) are also lower, with support around $63.25.

Among individual stocks, Lululemon Athletica Inc. (LULU) is down roughly 20% after earnings and is trading at levels not seen since 2018. The stronger long-term support area is around $80 to $81, while the stock is still around $98. That means the more attractive setup would come lower rather than chasing it here.

Zscaler, Inc. (ZS) initially moved higher after earnings before turning negative. The main area of interest is between $150 and $155, with the tighter trading zone around $154 to $155. Planet Labs PBC (PL) is bouncing from near 52-week lows, but the first meaningful resistance area is around $24.50 to $25.

Tesla, Inc. (TSLA) is pulling back sharply after a strong rally and gap fill. The descending trend line from the 2024 high sits around $437 to $440, and that remains an important area to watch if price comes back into it. Apple Inc. (AAPL) has also rallied from its earnings decline. If Apple fills its open gap, that becomes a more interesting area for potential resistance.

Bitcoin (BTC) is getting hit after yesterday's strong rally ran directly into major resistance. The resistance zone sits roughly between $112,000 and $113,000, with descending trend lines also converging in that area. Bitcoin is increasingly trading like gold in relation to yields: when yields fall, both tend to strengthen, and when yields rise, both come under pressure. Until Bitcoin breaks through that resistance and holds above it, this remains a resistance test rather than a confirmed breakout.

For now, 4.8% to 4.81% on the 10 Year Treasury Yield is the level connecting everything. If yields stay below it, stocks, gold, and Bitcoin have room to stabilize; if yields break toward 5%, the pressure increases quickly. The better approach here is to stay patient and let price come to the important levels rather than chase moves directly into resistance.