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The Fed raises interest rates for the first time in three years! How will the market react?
美股在逃哈士奇
joined discussion · Aug 7 15:24

Here’s a ghost story: the nonfarm payrolls arrive tonight at 20:30, and Wall Street’s script is already written.

Last night’s U.S. stock market can be summed up in one word:Spineless.
The Dow fell 0.85%, ending a five-day winning streak and retreating from its record high. The S&P 500 dropped 0.18%, while the Nasdaq declined 0.06%, marking its second consecutive loss. Meanwhile, the VIX tumbled 4.17% to 15.15—The market isn’t scared at all—it’s just waiting.What are you waiting for?Tonight at 20:30, the U.S. July nonfarm payrolls data will be released.
First, let’s recap what happened last night—there was a massive amount of news.
The Strait of Hormuz exploded again. Iran’s parliament is reviewing a new navigation agreement that would ban U.S. and Israeli vessels from passing through the strait. The Iranian navy has already struck 'hostile targets' near the strait’s entrance. Brent crude surged more than 5% intraday, breaking above $83, while WTI climbed past $78.Rising oil prices stoked inflation expectations, pushing U.S. Treasury yields higher across the board, with the 10-year yield surging to 4.66%.
Last night, US stocks summed up in one word:Spineless. The Dow fell 0.85%, ending its five-day winning streak and stepping back from record highs. The S&P 500 dropped 0.18%, and the Nasdaq declined 0.06%, marking their second consecutive loss. Meanwhile, the VIX slid to 15.15, down 4.17%—The market isn’t scared at all—it’s just waiting.What are you waiting for?Tonight at 20:30, the US July nonfarm payrolls data will be released. First, let’s recap what happened last night—it was packed with market-moving news. The Strait of Hormuz flared up again. Iran’s parliament is reviewing a new navigation agreement that would ban US and Israeli vessels from passing through the strait. The Iranian navy has already struck 'hostile targets' near the strait’s entrance. Brent crude surged more than 5% intraday, breaching $83 per barrel, while WTI climbed above $78.Rising oil prices stoked inflation expectations, pushing US Treasury yields higher across the board., the 10-year yield surged to 4.66%. Google added insult to injury—issuing $25 billion in corporate bonds, with orders hitting $1.15 trillion, four times above expectations, intensifying supply pressure on long-end U.S. Treasuries. Memory chip stocks collapsed—Western Digital dropped 13%, and SanDisk fell nearly 7%. Software stocks fared even worse—AppLovin plunged nearly 20%, and Datadog slid 19%. Tonight’s nonfarm payrolls report has three possible scenarios—and each is crazier than the last. Markets expect an increase of83,000with the unemployment rate at 4.2%. The forecast range is absurdly wide—from 18,000 to 83,000。 Scenario one: extremely weak data (<50,000) Markets would instantly switch to a 'recession trade.' Oil prices are still above $80, inflation hasn’t eased, yet the labor market collapses first...
Google added insult to injury by issuing $25 billion in corporate bonds, drawing orders four times above expectations at $115 billion, intensifying supply pressure on the long end of the Treasury curve. Memory chip stocks collapsed—Western Digital fell 13%, and SanDisk dropped nearly 7%. Software stocks fared even worse—AppLovin plunged nearly 20%, and Datadog sank 19%.
Tonight’s nonfarm payrolls report has three possible scenarios—and each one is crazier than the last.
Market expectations for new additions83,000 people, with an unemployment rate of 4.2%. The forecast range is absurdly wide—from 18,000 to 83,000。
Last night, US stocks summed up in one word:Spineless. The Dow fell 0.85%, ending its five-day winning streak and stepping back from record highs. The S&P 500 dropped 0.18%, and the Nasdaq declined 0.06%, marking their second consecutive loss. Meanwhile, the VIX slid to 15.15, down 4.17%—The market isn’t scared at all—it’s just waiting.What are you waiting for?Tonight at 20:30, the US July nonfarm payrolls data will be released. First, let’s recap what happened last night—it was packed with market-moving news. The Strait of Hormuz flared up again. Iran’s parliament is reviewing a new navigation agreement that would ban US and Israeli vessels from passing through the strait. The Iranian navy has already struck 'hostile targets' near the strait’s entrance. Brent crude surged more than 5% intraday, breaching $83 per barrel, while WTI climbed above $78.Rising oil prices stoked inflation expectations, pushing US Treasury yields higher across the board., the 10-year yield surged to 4.66%. Google added insult to injury—issuing $25 billion in corporate bonds, with orders hitting $1.15 trillion, four times above expectations, intensifying supply pressure on long-end U.S. Treasuries. Memory chip stocks collapsed—Western Digital dropped 13%, and SanDisk fell nearly 7%. Software stocks fared even worse—AppLovin plunged nearly 20%, and Datadog slid 19%. Tonight’s nonfarm payrolls report has three possible scenarios—and each is crazier than the last. Markets expect an increase of83,000with the unemployment rate at 4.2%. The forecast range is absurdly wide—from 18,000 to 83,000。 Scenario one: extremely weak data (<50,000) Markets would instantly switch to a 'recession trade.' Oil prices are still above $80, inflation hasn’t eased, yet the labor market collapses first...
Scenario One: Data comes in extremely weak (<50,000)
Markets instantly switch to 'recession trade.' Oil prices are still above $80, inflation hasn’t eased, yet the labor market cracks first—stagflation. Even Fed rate cuts won’t help. Gold surges past $4,300; tech stocks? They’re the first to drop.
Scenario Two: Data comes in just right (80,000–100,000)
The soft-landing narrative gets another lease on life. US equities continue trading sideways at elevated levels, with neither bulls nor bears gaining clear conviction,Keep guessing。
Scenario Three: Data comes in surprisingly strong (>120,000)
Markets instantly switched to 'rate hike trades.' The probability of a Fed rate hike in September has already risen to 56.5%; stronger data could push it straight above 70%.
Tech stock valuations have already been cut in half.
Technical indicators: The S&P 500 and Dow Jones have already shown 'topping signals.'
The Dow previously hit an intraday high of 54,744 points, surging to a record high of 7,793 points. The Nasdaq 100 skyrocketed by over 2,800 points in the past five days, briefly approaching the 30,000-point mark.But here's the problem:The divergence where the Dow and S&P are making new highs while the Nasdaq lags behindmirrors the exact scenario seen in early January 2022, right before US equities peaked and began their decline.The S&P 500 currently sits at 7,709 points, with bulls and bears reaching a temporary equilibrium above the 7,700 level. Technically, the Dow is pulling back below the round-number support at 54,000 points.
If stocks continue to fall after tonight’s nonfarm payrolls report, this 'final rally' could officially come to an end.
Last night, US stocks summed up in one word:Spineless. The Dow fell 0.85%, ending its five-day winning streak and stepping back from record highs. The S&P 500 dropped 0.18%, and the Nasdaq declined 0.06%, marking their second consecutive loss. Meanwhile, the VIX slid to 15.15, down 4.17%—The market isn’t scared at all—it’s just waiting.What are you waiting for?Tonight at 20:30, the US July nonfarm payrolls data will be released. First, let’s recap what happened last night—it was packed with market-moving news. The Strait of Hormuz flared up again. Iran’s parliament is reviewing a new navigation agreement that would ban US and Israeli vessels from passing through the strait. The Iranian navy has already struck 'hostile targets' near the strait’s entrance. Brent crude surged more than 5% intraday, breaching $83 per barrel, while WTI climbed above $78.Rising oil prices stoked inflation expectations, pushing US Treasury yields higher across the board., the 10-year yield surged to 4.66%. Google added insult to injury—issuing $25 billion in corporate bonds, with orders hitting $1.15 trillion, four times above expectations, intensifying supply pressure on long-end U.S. Treasuries. Memory chip stocks collapsed—Western Digital dropped 13%, and SanDisk fell nearly 7%. Software stocks fared even worse—AppLovin plunged nearly 20%, and Datadog slid 19%. Tonight’s nonfarm payrolls report has three possible scenarios—and each is crazier than the last. Markets expect an increase of83,000with the unemployment rate at 4.2%. The forecast range is absurdly wide—from 18,000 to 83,000。 Scenario one: extremely weak data (<50,000) Markets would instantly switch to a 'recession trade.' Oil prices are still above $80, inflation hasn’t eased, yet the labor market collapses first...
One-sentence summary:
Even before the nonfarm payrolls release, markets were already on edge—oil prices are rising, US Treasuries are rallying, geopolitical tensions are flaring, and memory chip stocks are collapsing.Strong data → rising expectations for rate hikes → pressure on tech stocks. Weak data → growing recession fears → sell first, ask questions later.The only bullish scenario:Data that’s “just right” —— Nonfarm payrolls add 80,000–90,000 jobs, unemployment rate holds steady, and hourly wages rise modestly —— markets interpret this as a 'soft landing,' and US stocks keep rallying.
Last night, US stocks summed up in one word:Spineless. The Dow fell 0.85%, ending its five-day winning streak and stepping back from record highs. The S&P 500 dropped 0.18%, and the Nasdaq declined 0.06%, marking their second consecutive loss. Meanwhile, the VIX slid to 15.15, down 4.17%—The market isn’t scared at all—it’s just waiting.What are you waiting for?Tonight at 20:30, the US July nonfarm payrolls data will be released. First, let’s recap what happened last night—it was packed with market-moving news. The Strait of Hormuz flared up again. Iran’s parliament is reviewing a new navigation agreement that would ban US and Israeli vessels from passing through the strait. The Iranian navy has already struck 'hostile targets' near the strait’s entrance. Brent crude surged more than 5% intraday, breaching $83 per barrel, while WTI climbed above $78.Rising oil prices stoked inflation expectations, pushing US Treasury yields higher across the board., the 10-year yield surged to 4.66%. Google added insult to injury—issuing $25 billion in corporate bonds, with orders hitting $1.15 trillion, four times above expectations, intensifying supply pressure on long-end U.S. Treasuries. Memory chip stocks collapsed—Western Digital dropped 13%, and SanDisk fell nearly 7%. Software stocks fared even worse—AppLovin plunged nearly 20%, and Datadog slid 19%. Tonight’s nonfarm payrolls report has three possible scenarios—and each is crazier than the last. Markets expect an increase of83,000with the unemployment rate at 4.2%. The forecast range is absurdly wide—from 18,000 to 83,000。 Scenario one: extremely weak data (<50,000) Markets would instantly switch to a 'recession trade.' Oil prices are still above $80, inflation hasn’t eased, yet the labor market collapses first...
But how likely is this scenario? You be the judge.
Content Disclosure: Personal opinion
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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