US stocks opened the week with gains on Monday, recovering from last Friday’s heavy sell-off triggered by weak labor data and renewed trade tensions. All three major indexes recorded gains, led by a surge in technology shares and increased expectations for a Federal Reserve rate cut in September.
The S&P 500 climbed 1%, while the Dow Jones Industrial Average added 0.8%. The Nasdaq Composite outperformed with a 1.4% rise, following its steepest weekly decline since April. Monday’s rebound came after the Dow fell 2.9% last week and the S&P 500 dropped 2.4%, their worst showings in months.
Friday’s release of July’s jobs report significantly altered market sentiment, showing only 73,000 new jobs added compared to the 100,000 forecast. The previous months’ revisions showed deeper weakness: June’s job growth dropped to 14,000 from an earlier 147,000, and May’s figures were revised to 19,000 from 125,000.
These figures triggered concern among traders and economists, as they point to prolonged labor market weakness. President Donald Trump responded by firing the commissioner of the Bureau of Labor Statistics. He criticized the agency’s credibility and announced plans to nominate new leadership.
Market expectations shifted rapidly after the jobs data. According to CME FedWatch data, the odds of a rate cut at the next Federal Open Market Committee (FOMC) meeting rose to 86%. This contrasted with the outlook just days earlier when the Fed held rates steady and signaled caution over trade-induced inflation.
In addition to concerns about the job market, investors also paid attention to the new tariffs that the White House implemented. The new tariffs, which range from 10% to 41%, are likely to affect many goods from major trading partners. For example, Canada now has a 35% tariff, up from 25%, and goods that are transshipped will have to pay a 40% duty.
These changes also raised worries about added inflation and slower economic growth. Bank stocks fell sharply on Friday amid fears of lower loan demand. JPMorgan lost over 2%, while Bank of America and Wells Fargo declined more than 3% each.
Analysts noted that valuation concerns and narrowing market breadth contributed to defensive positioning. “Growth concerns are mounting, and traders are rotating out of high-multiple stocks,” said Joseph Cusick of Calamos Investments.
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Investors are also monitoring a busy earnings week. Over 100 companies in the S&P 500, including Palantir, Disney, and Eli Lilly, are scheduled to report. Their performance may influence sentiment heading into mid-August.
Tesla gained 2% before Monday’s market open following reports that CEO Elon Musk had received 96 million shares worth approximately $29 billion. The award comes amid rising scrutiny over executive compensation and governance.