US Jobs Report Sparks Equity Rally, Oil Surge Reignites Inflation Fears

The recent jobs report in the US sparked both excitement and concern among investors. On August 7, 2026, the Bureau of Labor Statistics (BLS) released the July Employment Situation Report, revealing a loss of 23,000 nonfarm payroll jobs, which was a stark contrast to the consensus forecasts calling for an 83,000 gain.

This softer-than-expected jobs data initially fueled optimism that the Federal Reserve might pause or slow its rate hikes. U.S. equities responded positively, with the S&P 500 and Nasdaq 100 rallying to fresh record highs by August 10. However, a sharp rise in oil prices has complicated the picture, reigniting inflation concerns.

The Brent crude surge ahead of the July CPI release scheduled for August 12 at 8:30 AM ET has shifted investor focus back to the Fed's inflation mandate. This dynamic has pushed the probability of a September rate hike back to roughly 50-50, turning the Fed's policy path into a coin toss.

Bitcoin did not join the equity rally and instead fell 2.12% to $63,964 on August 11, alongside Ethereum's 2.83% drop to $1,873.66. Institutional Bitcoin ETF flows turned negative for the first time in a week, with $144.6 million in net outflows on August 10.

The interplay between labor market softness and inflation dynamics means that the Fed's next moves are highly data-dependent. The July CPI report will be crucial in determining whether inflation remains sticky or shows signs of easing, which in turn will influence whether the Fed leans dovish or hawkish at its September 16 FOMC meeting.