Weaker Payrolls Report Slows Interest Rate Hike Momentum

US markets closed the week on a high note as July's payrolls report came in weaker than expected, reducing concerns of an imminent interest rate hike.

The non-farm payrolls reading showed a loss of 23,000 jobs in July, far below the predicted gain of 80,000. This led to a downward revision of previous months' reports by 103,000 combined.

While the unemployment rate fell to 4.1%, this was seen as a concern since it may indicate that some people have dropped out of the labor force rather than an improvement in job prospects.

The report's mixed signals reduced the likelihood of a September interest rate hike from almost 70% last week to around 45%. The Federal Reserve will be keeping a close eye on inflation data, with the Consumer Price Index due out on Wednesday, expected to show a slight easing to 3.4%.

A strong quarterly reporting season has driven optimism in the market, with 90% of S&P 500 companies having released their results and showing an estimated 50% spike in profit growth.