Wall Street Brief (August 8): US stocks rose broadly on Friday, with growth and small-cap stocks leading the advance; optical communications extended strong gains while memory stocks continued to retreat. Weaker job data eased rate hike concerns, lifting gold and pressuring oil prices.

Summary: US equities rallied across the board on Friday, with the S&P 500 up 0.62%, the Nasdaq up 1.30%, the Dow Jones Industrial Average up 0.28%, and the Russell 2000 up 1.10%. The Nasdaq and Russell 2000 notably outperformed the Dow, signaling a renewed leadership by growth and small-cap stocks. The VIX fell to 14.90, down 1.65% on the day, reflecting persistently warm market sentiment, though index option put/call ratios remained near 1, indicating lingering caution. July U.S. employment unexpectedly declined, reducing market expectations for a near-term Fed rate hike, pushing Treasury yields lower and easing valuation pressure on equities. Sector-wise, AI-related optical communications, software, gold mining, and uranium stocks gained strength, while AI memory stocks continued to pull back, highlighting ongoing divergence within the tech sector. In broader asset classes, the 10-year Treasury yield dropped 0.21%, gold rose 2.39%, crude oil fell 1.47%, Bitcoin advanced 0.83%, and the dollar index declined 0.33%.

I. Major Events

1. The U.S. Bureau of Labor Statistics released the July employment report.

U.S. nonfarm payrolls declined by 23,000 in July, marking the first monthly drop since February; prior months’ job gains were also significantly revised downward. The unemployment rate remains low, suggesting the labor market is showing signs of softening but has not yet tipped into recession. The report reduced market bets on a Fed rate hike in September, sending Treasury yields lower and easing interest-rate pressure on equity valuations. With unemployment showing no significant deterioration, market focus remains on improved policy expectations rather than recession fears.

II. Major Trends

In the short term, QQQ has gained 5.67% over two weeks, while IWM has risen 3.57%, indicating that growth and small-cap stocks have rebounded more strongly than traditional large-cap names. Over a three-month horizon, however, DIA is up 9.20%, still outpacing QQQ’s 4.16%, suggesting the mid-term leadership of industrials-heavy indices remains intact.

Market breadth remains healthy, with the equal-weighted S&P (RSP) up 8.55% over three months, surpassing SPY’s 5.97% gain. However, MAGS has only edged up 0.36% over the same period, indicating that recent short-term rebounds in mega-cap tech are not yet sufficient to reverse the medium-term divergence trend.

III. Market Sentiment

The VIX closed at 14.90, down 1.65% on the day, as volatility continued to decline; the CNN Fear & Greed Index rose to 64 from a previous reading of 59, indicating a clear warming in sentiment. The CBOE total put/call ratio stood at 0.77, with the index options put/call ratio at 0.99 and the equity options put/call ratio at 0.64. Trading in individual stocks leaned positive, yet demand for index option protection remained, showing that investors have not entirely abandoned defensive positioning.

Market Scan

1. Index ETFs

The Nasdaq-100 (QQQ) rose 1.17%, and the Russell 2000 (IWM) gained 1.11%, outperforming both the S&P 500 (SPY) and the Dow Jones Industrial Average (DIA), as growth and small-cap stocks moved back to the forefront. Japan's EWJ advanced 1.84%, and South Korea's EWY climbed 1.20%, though their gains still lagged behind the strongest growth segments within the U.S. market.

2. Sector Performance

Consumer Discretionary (XLY) rose 1.49%, Technology (XLK) gained 1.42%, and Materials (XLB) increased 1.32%, marking them as the day’s notably strong sectors; Energy (XLE) fell 1.13%, underperforming the broader market. At the sub-industry level, Gold Miners (GDX) surged 7.11%, Uranium Mining (URA) jumped 3.96%, Cloud Computing (SKYY) rose 3.71%, Software (IGV) gained 3.29%, Solar (TAN) climbed 2.93%, Copper Miners (COPX) advanced 2.25%, and Semiconductors (SMH) rose 1.96%. DRAM declined 1.63%, one of the few areas showing notable weakness, highlighting ongoing divergence within the AI supply chain.

3. The Magnificent Seven Tech Stocks

Tesla rose 2.83%, and NVIDIA gained 2.27%, while Apple, Microsoft, Amazon, and Meta posted relatively modest moves, and Google declined 0.88%. Mega-cap tech stocks overall showed strength, though not all rose in unison—investor focus remained concentrated on high-beta and AI-related names.

4. Chinese ADRs

Futu rose 4.31%, while Tencent Music fell 0.63%. Chinese ADRs lacked a unified theme and continued to trade with significant stock-specific divergence. Their overall performance did not materially lag the broader U.S. market, but they also lacked a common catalyst capable of driving broad-based sector rotation.

5. Cryptocurrencies

Bitcoin rose 0.83%, MicroStrategy (MSTR) gained 3.26%, Circle (CRCL) climbed 5.36%, while Marathon Digital (MARA) dropped 5.26%. Bitcoin’s price and select crypto-related equities moved higher together, yet notable dispersion persisted among crypto-linked stocks, with capital still focused on a handful of high-beta names.

$S&P 500 Index (.SPX.US)$ $SPDR S&P 500 ETF (SPY.US)$ $NASDAQ 100 Index (.NDX.US)$ $Invesco QQQ Trust (QQQ.US)$ $Dow Jones Industrial Average (.DJI.US)$ $State Street® SPDR® Dow Jones Industrial Average® ETF Trust (DIA.US)$ $Russell 2000 Index (.RUT.US)$ $iShares Russell 2000 ETF (IWM.US)$ $Roundhill Magnificent Seven ETF (MAGS.US)$ $USD (USDindex.FX)$ $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $XAU/USD (XAUUSD.CFD)$ $SPDR Gold ETF (GLD.US)$ $CBOE Volatility S&P 500 Index (.VIX.US)$ $CME-Bitcoin RR Futures (OCT6) (BTCmain.US)$ $iShares Ethereum Trust ETF (ETHA.US)$ $NVIDIA (NVDA.US)$ $Tesla (TSLA.US)$ $Meta Platforms (META.US)$ $Amazon (AMZN.US)$ $Alphabet-C (GOOG.US)$ $Microsoft (MSFT.US)$ $Apple (AAPL.US)$

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