August 4, 2025: US Non-Farm Payroll Data Shocks! Does the US Stock Market Face Opportunities Amid Risks?

US non-farm data for July were far behind market expectations, with non-farm job additions in July of only 0.073 million, well ahead of market expectations of 0.106 million. Unsurprisingly, the revised data for May and June saw a decrease of 0.258 million people in the employment figures for these two months compared to the previous report. The latest data led to a big jump in US economic data, with overall market risk-averse sentiment rising, and US equities have seen a recent correction, with the S&P 500 Index generating the largest single-day drop in two months.

One thing to note is that the most shocking thing is only the correction in the non-farm data, and there has not been a substantial change in the market's view of the US economy. In the author's last month's article”US STOCKS HIT NEW HIGHS, AN UNPREDICTABLE INVESTMENT TRACK FOR THE SECOND HALF OF THE YEARGiven that the US market is buoyant and unimaginably strong, especially private sector job additions have moved early, in the first half of 2025, such as Big Technology $Microsoft(MSFT.US)$ 、 $Meta Platforms(META.US)$ und $Amazon(AMZN.US)$ Many big tech companies have been cutting back on their hands, and signs of a weakening labor market and the momentum of disinflation have long been confirmed.

Moreover, the number of private sector job openings in June fell sharply to 3 trillion, the data is not surprising, according to the head of the Bureau of Labor Statistics.

Rate cut expected to rise vs risk-averse sentiment

In the wake of the volatile market data, the markets warmed up against the expected decline in the United States. Further, the Federal Reserve Director Adriana Kugler made an extraordinary request on Friday that the CFO has the right to vote, which further increases the market's forecast for the decline. As of August 4 today, the latest Interest Rates show that the Fed's chances of a decline from September 17 increased to 80.5%.

This is the cause $U.S. 10-Year Treasury Notes Yield(US10Y.BD)$ The main reason for the rise, $黄金主连 (2512) (GCmain.US)$ Prices are also sought after as well. At the same time, due to the rare adjustment in US stocks in recent months, $CBOE Volatility S&P 500 Index(.VIX.US)$ There is a hint of urgency. Based on the Asset Price data above, the risk sentiment in the market is on the rise. Although the rise in Gold and US bonds may only be the expected reason for a fall in interest rates, it is now early to talk about an emergency rise in hedging sentiment.

Any immediate upside from the VIX Index (CBOE S&P 500 Index) mentioned above suggests that it will turn into a bearish mood in late March and early April. The recent market situation so far looks good, as the market momentum is only the non-farm data and some trade agreement from the Tramp, it cannot be ruled out that the non-VIX Index only showed a brief slight slight pullback on May 19 and June 11, simply reflecting the healthy adjustment after the emergence of the emergency rally. The core of TACO Trade is unchanged, and there is no need to continue Bearish US stocks in the short term.

Again, if you look at the past June to July 23rd, $Russell 2000 Index(.RUT.US)$ Performance Runs and Wins $S&P 500 Index(.SPX.US)$ und $Nasdaq Composite Index(.IXIC.US)$ , From the perspective of many years of experience in the US stock market, the persistence of the gains of small and medium-sized stocks has not been long. Recoil is easily driven by the adjustment in emerging technologies in the major markets. Rosin 2000 followed by the technical trend of July 23, similar to the S&P 500 Index issued a weak signal on July 31 (Rosin 2000) (Note: The S&P 500 Index's KDJ posted a profitable signal early on, followed by a new record high)

Changes in market interest rate expectations

The expected increase in interest rate futures from the September 17 decline is expected to fall to the bottom of the year. At the last meeting of the current year on December 10, the market's sustained interest rate will fall 2~3 times to the right, with the latest estimate on August 4, and the market's expected interest rate will decrease by 2x The odds of 3.75~4.00cm are correspondingly large. To put it simply, the market is only expected to warm up for the month of September, but there is no significant change in the timing of the overall slowdown in the next half of the year, and the market's view of the US economy is actually not much changed in the outlook for the US economy.

For changes in the outlook for the US economy in the short term, please refer to events related to the financial calendar in the Futubull APP:

— Initial Jobless Relief Gold Number Announced on Thursdays

— US Retail Sales Monthly Rate

— University of Michigan Consumer Confidence Index

— Reaction to U.S. Treasury Bonds Auction Over 10 Years

Technical Analysis of S&P 500 Index

As mentioned above, the Technical Indicator KDJ of the S&P 500 Index showed a bullish signal before July 29, and after the index reached a new all-time high in July 31, a reversal was shown on the technical side. The key support position in the future can see 6200 points, while the yield indicator can be set above 6200 points in the short-term aftermarket, and the short-term post-market view does not have to diverge, the market focus points may continue to range over the quarterly performance of individual companies. In the area of resistance, the descent point below the fifth anniversary of the fall.

To determine the movement of the ultra-short line, it is recommended to observe $标普500指数主连 (2509) (ESmain.US)$ The hourly chart shows the resistance position of the short-term downslope rails this morning, MACD and KDJ have produced a reverberation signal, and the deceleration of the start of the downtrend has become the first step. The short-term Gold ratio acts as a benchmark, the first bounce is roughly 6328 to the left, and the short-term drop of 0.382, which can be seen as the first key resistance position after the market. The indicator is able to determine the correct risk, with 6382 points, and 0.618 for all minor drops.

Small summary

People recognize that the appearance of non-farm data alone does not necessarily change significantly in the market, but the announcement of trade talks and non-farm data shows a clearer adjustment in the space of technical adjustments. While it is early to talk about whether August will be a traditional soft season, however, the earnings power of not only Technology has been strong in this cycle, and the EPS growth of the P500 is still good, and the value of tech stocks remains at a high level. The greatest risk reflects only on some small and medium stocks, in particular the Related Concept Stocks that operate in RWA. A number of high quality Technology stocks, such as $Alphabet-C(GOOG.US)$ , MSFT, META, AND $Apple(AAPL.US)$ Equally, the trajectory of all AI investments will not produce major changes. As long as the downward trend in interest rates is unchanged, the medium-long line is conditioned to continue to see the performance of Tech Technology shares.

Technology stocks with high valuations or shortward fundamentals without taking into account the current market climate and turning to criticism, for example, how to go public $Advanced Micro Devices(AMD.US)$ und $Palantir(PLTR.US)$ This type of stock is best suited for deployment until after the results are announced.

Chief Analyst of Futu Securities Liang

(The author is a licensee of the Securities and Exchange Commission and its affiliates do not have any financial interest in the proposed issuer of shares)