Job Growth, Inflation, Fed Policy, Demand for AI Computer Power, & Small Business Sentiment
Weekly Market Recap
Markets traded higher for a third consecutive week. The S&P 500 gained +0.36%, the Nasdaq 100 rose +0.14%, and the Russell 2000 small-cap index returned +1.12%, with the S&P 500 and Russell 2000 both setting new all-time highs. Technology stocks rose +2.9%, while Energy led all sectors as oil prices rose nearly +5%. International stocks performed in line with U.S. stocks, while the U.S. dollar held steady. Bonds traded higher as markets reduced expectations for another Fed rate hike, with shorter-maturity bonds outperforming longer-maturity bonds. Gold prices continued to drift higher, while the VIX fell below 15 and sits near a year-to-date low.
Key Takeaways
Labor Market Softens in July
Employers cut -23,000 jobs last month, while May and June payroll gains were revised lower by a combined -103,000. The negative revisions indicate hiring was weaker than initially reported. However, despite slower job growth, the unemployment rate remained relatively low at 4.1%, and private-sector employment grew +30,000. The report shows a job market that has started to soften, although conditions remain far from the weakness normally associated with a recession. Why it matters: The data weakens the argument that interest rates should remain elevated due to labor market conditions.
July’s Inflation Data Ease Inflation Concerns Tied to the Recent Surge in Oil Prices
Headline consumer prices rose just +0.1% in July, while producer prices were unchanged, coming in below expectations for a modest increase. The energy component within CPI is still +14.5% higher than a year ago, but so far, the rise hasn’t translated into a similar increase across the broader inflation indexes. Why it matters: Inflation remains above the Fed’s target, but July’s data eased concerns that the energy shock is spreading more broadly.
Expectations for a September Rate Hike Decline as the Economic Data Soften
Heading into last week’s jobs report, markets assigned a greater than 50% probability to a September rate hike, driven by persistent inflation concerns and three dissents at the Fed’s July meeting in favor of higher rates. However, expectations for a September rate hike fell after the weak payroll report, moved lower again after Wednesday’s CPI release, and declined further after Thursday’s flat producer-price report. The shift reflects a different policy backdrop than investors faced several weeks ago: the labor market has softened while the latest inflation data has remained relatively contained, reducing the immediate case for additional tightening. Why it matters: With the Fed providing less guidance, incoming economic datapoints carry more weight. This week’s data shifted the balance away from a September hike.
Demand for Artificial Intelligence Computing Power Remains Strong
Companies providing the physical infrastructure needed to run AI models continue to report rapid growth. CoreWeave buys advanced computer chips, installs them in data centers, and leases the computing capacity to customers, including some of the largest tech companies. Its quarterly revenue rose to a record $2.58 billion, while its backlog climbed to $104 billion. Other AI-infrastructure companies reported similarly strong growth this week, reinforcing that demand extends beyond just CoreWeave. Why it matters: Questions remain about the magnitude of companies’ AI spending, but rapid growth in computing demand signals strong underlying demand both to train and run AI models.
Small- Business Confidence Rises to the Highest Level in Nearly a Year
The NFIB Small Business Optimism Index climbed to 99.8 in July, its highest since August 2025 and above its long-term average. Small businesses, which account for nearly half of private-sector employment, have faced several years of elevated inflation, higher borrowing costs, and difficulty finding workers. Those pressures remain, but July’s survey showed improvement across most categories, including a sharp increase in hiring plans. Why it matters: Improving sentiment suggests some headwinds facing small businesses are beginning to ease.
Concerns or questions about how your investment portfolio will hold up in the current market environment? Contact Financial Synergies today.
We are a boutique, financial advisory and total wealth management firm with over 35 years helping clients navigate turbulent markets. To learn more about our approach to investment management please reach out to us. One of our seasoned advisors would be happy to help you build a custom financial plan to help ensure you accomplish your financial goals and objectives. Schedule a conversation with us today.
More relevant articles by Financial Synergies:
Blog Disclosures
This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own financial advisors as to legal, business, tax, and other related matters concerning any investment.
The commentary in this “post” (including any related blogs, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Financial Synergies Wealth Advisors, Inc. employees providing such comments, and should not be regarded as the views of Financial Synergies Wealth Advisors, Inc. or its respective affiliates or as a description of advisory services provided by Financial Synergies Wealth Advisors, Inc. or performance returns of any Financial Synergies Wealth Advisors, Inc. client.
Any opinions expressed herein do not constitute or imply endorsement, sponsorship, or recommendation by Financial Synergies Wealth Advisors, Inc. or its employees. The views reflected in the commentary are subject to change at any time without notice.
Nothing on this website constitutes investment or financial planning advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. It also should not be construed as an offer soliciting the purchase or sale of any security mentioned. Nor should it be construed as an offer to provide investment advisory services by Financial Synergies Wealth Advisors, Inc.
Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Financial Synergies Wealth Advisors, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
Any charts provided here or on any related Financial Synergies Wealth Advisors, Inc. personnel content outlets are for informational purposes only, and should also not be relied upon when making any investment decision. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Information in charts have been obtained from third-party sources and data, and may include those from portfolio securities of funds managed by Financial Synergies Wealth Advisors, Inc. While taken from sources believed to be reliable, Financial Synergies Wealth Advisors, Inc. has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. All content speaks only as of the date indicated.
Financial Synergies Wealth Advisors, Inc. is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Financial Synergies Wealth Advisors, Inc. and its representatives are properly licensed or exempt from licensure. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
See Full Disclosures Page Here
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Weekly Market Recap – Job Growth, Inflation, Fed Policy, Demand for AI Computer Power, & Small Business Sentiment
Job Growth, Inflation, Fed Policy, Demand for AI Computer Power, & Small Business Sentiment
Weekly Market Recap
Markets traded higher for a third consecutive week. The S&P 500 gained +0.36%, the Nasdaq 100 rose +0.14%, and the Russell 2000 small-cap index returned +1.12%, with the S&P 500 and Russell 2000 both setting new all-time highs. Technology stocks rose +2.9%, while Energy led all sectors as oil prices rose nearly +5%. International stocks performed in line with U.S. stocks, while the U.S. dollar held steady. Bonds traded higher as markets reduced expectations for another Fed rate hike, with shorter-maturity bonds outperforming longer-maturity bonds. Gold prices continued to drift higher, while the VIX fell below 15 and sits near a year-to-date low.
Key Takeaways
Labor Market Softens in July
Employers cut -23,000 jobs last month, while May and June payroll gains were revised lower by a combined -103,000. The negative revisions indicate hiring was weaker than initially reported. However, despite slower job growth, the unemployment rate remained relatively low at 4.1%, and private-sector employment grew +30,000. The report shows a job market that has started to soften, although conditions remain far from the weakness normally associated with a recession. Why it matters: The data weakens the argument that interest rates should remain elevated due to labor market conditions.
July’s Inflation Data Ease Inflation Concerns Tied to the Recent Surge in Oil Prices
Headline consumer prices rose just +0.1% in July, while producer prices were unchanged, coming in below expectations for a modest increase. The energy component within CPI is still +14.5% higher than a year ago, but so far, the rise hasn’t translated into a similar increase across the broader inflation indexes. Why it matters: Inflation remains above the Fed’s target, but July’s data eased concerns that the energy shock is spreading more broadly.
Expectations for a September Rate Hike Decline as the Economic Data Soften
Heading into last week’s jobs report, markets assigned a greater than 50% probability to a September rate hike, driven by persistent inflation concerns and three dissents at the Fed’s July meeting in favor of higher rates. However, expectations for a September rate hike fell after the weak payroll report, moved lower again after Wednesday’s CPI release, and declined further after Thursday’s flat producer-price report. The shift reflects a different policy backdrop than investors faced several weeks ago: the labor market has softened while the latest inflation data has remained relatively contained, reducing the immediate case for additional tightening. Why it matters: With the Fed providing less guidance, incoming economic datapoints carry more weight. This week’s data shifted the balance away from a September hike.
Demand for Artificial Intelligence Computing Power Remains Strong
Companies providing the physical infrastructure needed to run AI models continue to report rapid growth. CoreWeave buys advanced computer chips, installs them in data centers, and leases the computing capacity to customers, including some of the largest tech companies. Its quarterly revenue rose to a record $2.58 billion, while its backlog climbed to $104 billion. Other AI-infrastructure companies reported similarly strong growth this week, reinforcing that demand extends beyond just CoreWeave. Why it matters: Questions remain about the magnitude of companies’ AI spending, but rapid growth in computing demand signals strong underlying demand both to train and run AI models.
Small- Business Confidence Rises to the Highest Level in Nearly a Year
The NFIB Small Business Optimism Index climbed to 99.8 in July, its highest since August 2025 and above its long-term average. Small businesses, which account for nearly half of private-sector employment, have faced several years of elevated inflation, higher borrowing costs, and difficulty finding workers. Those pressures remain, but July’s survey showed improvement across most categories, including a sharp increase in hiring plans. Why it matters: Improving sentiment suggests some headwinds facing small businesses are beginning to ease.
Concerns or questions about how your investment portfolio will hold up in the current market environment? Contact Financial Synergies today.
We are a boutique, financial advisory and total wealth management firm with over 35 years helping clients navigate turbulent markets. To learn more about our approach to investment management please reach out to us. One of our seasoned advisors would be happy to help you build a custom financial plan to help ensure you accomplish your financial goals and objectives. Schedule a conversation with us today.
More relevant articles by Financial Synergies:
Blog Disclosures
This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own financial advisors as to legal, business, tax, and other related matters concerning any investment.
The commentary in this “post” (including any related blogs, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Financial Synergies Wealth Advisors, Inc. employees providing such comments, and should not be regarded as the views of Financial Synergies Wealth Advisors, Inc. or its respective affiliates or as a description of advisory services provided by Financial Synergies Wealth Advisors, Inc. or performance returns of any Financial Synergies Wealth Advisors, Inc. client.
Any opinions expressed herein do not constitute or imply endorsement, sponsorship, or recommendation by Financial Synergies Wealth Advisors, Inc. or its employees. The views reflected in the commentary are subject to change at any time without notice.
Nothing on this website constitutes investment or financial planning advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. It also should not be construed as an offer soliciting the purchase or sale of any security mentioned. Nor should it be construed as an offer to provide investment advisory services by Financial Synergies Wealth Advisors, Inc.
Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Financial Synergies Wealth Advisors, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
Any charts provided here or on any related Financial Synergies Wealth Advisors, Inc. personnel content outlets are for informational purposes only, and should also not be relied upon when making any investment decision. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Information in charts have been obtained from third-party sources and data, and may include those from portfolio securities of funds managed by Financial Synergies Wealth Advisors, Inc. While taken from sources believed to be reliable, Financial Synergies Wealth Advisors, Inc. has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. All content speaks only as of the date indicated.
Financial Synergies Wealth Advisors, Inc. is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Financial Synergies Wealth Advisors, Inc. and its representatives are properly licensed or exempt from licensure. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
See Full Disclosures Page Here
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