US Stocks Rally on Weak NFP Data and Earnings Growth

The US stock market continued its rally last week, with both the Nasdaq Composite and S&P 500 reaching new highs. The Nasdaq Composite jumped to 26,690, its highest level since June 16, while the S&P 500 hit a record high of 7,794 points.

The key catalyst for this rally was the weak nonfarm payrolls (NFP) report, which lowered odds of future interest rate hikes. The economy lost 23k jobs in July, with most being government-related. This revision also cast a shadow on the June jobs report, indicating that the labor market remains under pressure.

Another important catalyst for US stocks this week will be the upcoming consumer price index (CPI) report. Economists expect the headline CPI to rise 0.1% in July after falling by 0.4% in the previous month. The annual inflation rate is expected to come in at 3.4%, down slightly from the previous month's 3.5%. A lower-than-expected inflation rate will be bullish for the stock market, as it reduces the possibility of the Fed hiking interest rates.

The ongoing earnings season has also been a key driver of the US stock market rally. Most companies have already published their earnings, with the blended earnings growth being 50%. Technology companies such as SanDisk and Western Digital have contributed significantly to this growth.