Equities Rise While Investors Reassess Interest Rate Expectations 

Most of the major market indexes closed the week moderately higher, despite a late-week pullback. Investors had to weigh strong corporate earnings and economic resilience against concerns that the Federal Reserve may hike interest rates later this month following the unexpectedly robust jobs report. Market sectors were mixed, with Energy and Communication Services posting gains, while Industrials, Materials and Real Estate lagged. Treasury yields moved higher last Friday after the release of the jobs report. Crude oil prices climbed nearly 9.5% last week as tensions between the U.S. and Iran continued to drive market sentiment.

August Hiring Surges, Signaling Renewed Labor Market Strength 

Job growth far exceeded expectations in August after increasing 162,000. Coupled with upward revisions in June and July, total employment from June through August increased 214,000, well above the average monthly gain of 31,000 over the prior 12 months. The total number of employed people increased by 569,000 in August. The unemployment rate, at 4.1%, was unchanged last month.

Eye on the Week Ahead 

The focus this week is on inflation data for August with the releases of the Consumer Price Index (CPI) and the Producer Price Index (PPI). July saw the CPI tick up 0.1% after falling 0.4% in June. The PPI was flat in July following a 0.1% (revised) decline the previous month.