Jobs Came Back Strong and Oil Broke $90 — Everything Now Rides on Wednesday’s CPI
The story flipped again. After July’s job losses, August hiring came roaring back with 162,000 new jobs — three times what economists expected — and the two prior months were revised higher. At almost the same time, the US and Iran resumed strikes on each other, oil tankers were hit in the Strait of Hormuz, and crude jumped back above $90. Strong jobs plus expensive oil is exactly the mix that argues for higher rates, and markets now see a 60% chance the Fed hikes next week. But one number can still change everything: August inflation (CPI) lands Wednesday, the last major data point before the Fed decides on September 16.
Summary
Three key numbers this week
A month ago the economy looked like it was stalling. In August it did the opposite: employers added 162,000 jobs, roughly three times the 53,000 forecast, and it was the first monthly gain in five and the strongest since March. Just as importantly, the alarming July figure was revised from a 23,000 loss to a 21,000 gain, and June was nudged higher too. In plain terms, the “the job market is collapsing” story that drove markets all summer has been largely walked back.
That would normally cheer investors, but it arrived with a hawkish twist. A healthy job market removes the main reason for the Fed to hold off, and at the same time the conflict between the US and Iran flared up again — both sides traded strikes, tankers were attacked in the Strait of Hormuz, and oil pushed back above $90. Higher oil feeds directly into inflation, so the combination lifted rate-hike odds to about 60% and pulled stocks lower on Friday, with the Dow down 272 points.
Now it all comes down to one release. August inflation (CPI) is published Wednesday, and it is the last big number the Fed sees before its September 16 decision. A cool reading would give the Fed room to leave rates alone despite the strong jobs data. A hot reading — made more likely by $90 oil — would hand the case to those who want a hike. Everything this week is a build-up to that number.
Last Week
What happened last week
September 4 (Fri) closing prices. Weekly change vs the previous Friday. It was a holiday-shortened week (US markets closed Monday).
Markets started the week nervous. On Tuesday, news that the US had struck Iranian targets sent oil and energy stocks up and pressured the broader market. Stocks then recovered midweek — a dovish comment from Fed Governor Christopher Waller, who suggested rates could come down, helped the S&P 500 and Nasdaq jump more than 1% on Wednesday, and Bitcoin briefly topped $81,000 for the first time in nearly four months.
Friday brought the reckoning. The blowout jobs report (162,000 versus 53,000 expected) pushed Treasury yields up sharply — the 2-year yield hit its highest since early 2025 — and rate-hike bets climbed to 60%. Stocks slipped as a result: the S&P 500 fell 0.38%, the Dow lost 272 points, and only small caps and a handful of energy names held up. Tesla dropped more than 6% after its long-awaited Cybercab robotaxi launch left investors underwhelmed.
The dividing line all week was interest rates. Anything sensitive to rates — big tech, gold, bonds — swung with each new signal, while energy climbed steadily on the Iran conflict and $90 oil. That tug-of-war between “strong economy” and “higher rates” is the backdrop heading into Wednesday’s inflation report.
| Asset | Close | Weekly change | Direction | Comment |
|---|---|---|---|---|
| Stock indices | ||||
| S&P 500US500 | 7,718.60 | −0.1% | Roughly flat | Gave back Friday’s gains after the strong jobs report lifted rate-hike odds. A midweek rally kept the week close to flat. Wednesday’s CPI is the next big test. |
| Nasdaq CompositeCOMP | 26,506.99 | +0.4% | Edged up | Held up better than the Dow thanks to Wednesday’s tech rally, but slipped Friday as yields rose. Rate-sensitive tech is the most exposed if CPI runs hot. |
| Dow JonesUS30 | 53,414.25 | −0.3% | Fell | Dropped 272 points Friday as Apple, Microsoft and Alphabet fell on higher yields. The most rate-sensitive of the major indices last week. |
| Russell 2000RUT | 2,975.65 | +0.1% | Held up | Small caps were surprisingly steady, rising 0.25% Friday even as yields jumped — a sign some of the hawkish shift was already priced in. |
| Currencies | ||||
| US Dollar IndexDXY | ~99.30 | −0.5% | Mixed | Dipped below 99 midweek on Waller’s dovish remarks, then bounced after the strong jobs report. CPI Wednesday is the next major driver for the dollar. |
| Euro / US dollarEURUSD | ~1.1430 | +0.4% | Firmed | Gained midweek on dollar softness before the jobs report. The path from here depends on how US CPI compares with the eurozone inflation picture. |
| US dollar / Japanese yenUSDJPY | ~148.20 | −1.5% | Yen surged | The yen had its strongest week in over a month, with the dollar falling to 155-level lows midweek before the jobs report. The hawkish Bank of Japan outlook continues to support it. |
| Pound / US dollarGBPUSD | ~1.3480 | +0.2% | Little changed | Steady on the week. UK data is light, so the pound will take its cue from the US CPI and the broad dollar direction. |
| Energy and commodities | ||||
| WTI crude oilUSOIL | ~$91.50 | +6.5% | Back above $90 | Jumped more than $5 to a three-month high as US-Iran strikes resumed and tankers were attacked in the Strait of Hormuz. The single biggest inflation risk into Wednesday’s CPI. |
| Brent crude oilUKOIL | ~$95.50 | +6.0% | Rose sharply | Followed WTI higher as ceasefire hopes faded. The US now reportedly wants any deal to cover both Hormuz and Iran’s nuclear programme, making a quick resolution unlikely. |
| Natural gasNATGAS | ~$2.95 | +1.7% | Firmed | Edged higher alongside the broader energy complex as Middle East supply risk lifted the whole sector. |
| Metals | ||||
| GoldXAUUSD | ~$4,476 | +4.3% | Record high | Hit a fresh record as the Iran conflict drove safe-haven demand, even with rate-hike odds rising. Slipped 1.4% Friday on the strong jobs report but held near the record. Central-bank buying remains a key support. |
| SilverXAGUSD | ~$35.20 | +3.5% | Rose | Tracked gold higher on safe-haven demand, with AI-related industrial buying adding a second source of support. |
| CopperCOPPER | ~$4.70 | +0.4% | Little changed | Roughly flat, caught between safe-haven caution and steady AI-related industrial demand. |
| Cryptocurrencies | ||||
| BitcoinBTCUSD | ~$79,935 | +25.0% | Four-month high | Surged past $81,000 midweek — its highest in nearly four months — on dovish Fed comments and crypto-legislation optimism, before easing after the jobs report. A powerful recovery from the summer lows. |
| EthereumETHUSD | ~$2,240 | +11.0% | Rallied | Joined Bitcoin’s rally on the same drivers. The Clarity Act push in Washington is the key policy catalyst as the Senate returns this month. |
| Government bond yields | ||||
| US 10-year yieldUS10Y | ~4.80% | +0.08pts | Rose | Climbed to 4.8% as strong jobs and $90 oil lifted inflation and rate-hike expectations. A hot CPI Wednesday could push it higher and pressure stocks further. |
| US 2-year yieldUS2Y | ~4.40% | +0.10pts | 2-year high | Jumped to its highest since early 2025 as the market priced a 60% chance of a September hike. This is the yield most tied to the Fed’s next move. |
| Notable companies | ||||
| TeslaTSLA | ~$395 | −6.0% | Cybercab letdown | Fell more than 6% Friday after its Cybercab robotaxi launch left analysts with more questions than answers. Its worst day since late July, wiping out the prior session’s gains. |
| BroadcomAVGO | ~$1,720 | Beat | Strong AI earnings | Beat estimates with roughly 100% annualised growth, capping a quarter in which the Nasdaq-100 delivered nearly 80% earnings growth — a reminder the AI demand story is still intact. |
| MicronMU | ~$956 | AI memory | Demand strong | Held near recent highs as AI-memory demand stayed exceptional. Part of the broad chip strength that continues even as rate worries weigh on the wider market. |
Main Influences
Three main influences on the market this week
The reasoning behind each is laid out here. The calendar and price levels further down refer back to these three.
Wednesday’s CPI — the last number before the Fed decides
Everything this week points to one release. August inflation (CPI, the Consumer Price Index — the main measure of how fast prices are rising) comes out Wednesday, and it is the final major data point before the Fed’s decision on September 16. After a strong jobs report and oil back above $90, the pressure is now on inflation to decide whether the Fed hikes or holds.
The set-up is simple to follow. A cool CPI would tell the Fed that inflation is still easing even though the job market is healthy, giving it room to leave rates unchanged — good news for stocks. A hot CPI, which $90 oil makes more likely, would strengthen the case for a rate hike next week, push bond yields up, and pressure the parts of the market most sensitive to rates, such as big tech. Producer prices (PPI, a measure of wholesale inflation that often points to where consumer prices are heading) arrive Thursday as a follow-up.
The conflict reignited — and it feeds straight into inflation
The most important new development is the return of the US-Iran conflict. After weeks of an uneasy truce, both sides resumed strikes, oil tankers were attacked in the Strait of Hormuz — the narrow shipping lane that carries a large share of the world’s oil — and crude jumped more than $5 to break back above $90. Reports suggest the US now wants any agreement to cover both Hormuz and Iran’s nuclear programme, which makes a quick ceasefire unlikely.
This matters because oil and inflation are directly linked: when energy costs rise, so does the price of almost everything that has to be moved or made. That is why $90 oil lands at the worst possible moment — right before Wednesday’s inflation report and the Fed’s decision. If the conflict escalates and oil keeps climbing, it strengthens the case for higher rates even if the economy would otherwise justify patience. Energy stocks and gold tend to benefit; almost everything else has to price in the added risk.
Hike or cut? Even Fed officials are sending opposite signals
Rarely has the Fed looked so divided this close to a decision. Chair Kevin Warsh signalled just over a week ago that inflation is his priority and a hike is on the table. Days later, Governor Christopher Waller suggested rates could come down, and Vice President JD Vance publicly urged the Fed to cut to make housing more affordable. Investors are left weighing genuinely opposite messages from people who all have a say.
For readers, the practical takeaway is that next week’s meeting is unusually unpredictable, and this week’s CPI is what tips the balance. Strong jobs and $90 oil lean hawkish (toward a hike); a cool inflation reading would give the doves the upper hand. Expect sharp reactions to Wednesday’s number, because it does not just report the past — it effectively casts a deciding vote in an argument the Fed itself has not settled.
The Week Ahead
Economic calendar and central bank decisions
All times are US Eastern Time (ET / GMT−4). Importance: H high · M medium · L low. The whole week builds toward Wednesday’s CPI and Thursday’s PPI, the last inflation data before the Fed’s September 16 decision.
Current central bank interest rates
Price Levels
Important price levels
For technical reference only. Support (a floor where buying tends to appear) in green; resistance (a ceiling where selling tends to appear) in red. These are estimates, not price targets.
| Instrument | Support | Resistance | Context |
|---|---|---|---|
| S&P 500US500 | 7,620 · 7,490 | 7,800 · 7,900 | Held near 7,720 despite the hawkish jobs data. A cool CPI could reopen 7,800; a hot one risks a pullback toward 7,620. |
| Nasdaq CompositeCOMP | 26,000 · 25,600 | 27,000 · 27,400 | The most rate-sensitive index. A soft CPI could push it toward 27,000; a hot one pressures the big tech names toward 26,000. |
| WTI crude oilUSOIL | $86 · $82 | $95 · $100 | Back above $90 on the Iran conflict. Escalation opens $95–100; any de-escalation points back toward $86 and eases the inflation threat. |
| GoldXAUUSD | $4,380 · $4,280 | $4,550 · $4,650 | At a record near $4,476 on safe-haven demand. Further conflict or a cool CPI could extend the run; a hot CPI and higher yields are the main pullback risk. |
| BitcoinBTCUSD | $76,000 · $72,000 | $82,000 · $85,000 | Recovered strongly toward $80,000. A cool CPI and crypto-legislation progress could retest $82,000; a hot CPI is the near-term risk. |
| US dollar / Japanese yenUSDJPY | 146 · 143 | 149 · 151 | Fell to 148 as the yen strengthened. A hot US CPI could push it back toward 149–151; the hawkish BOJ view caps the upside. |
| Euro / US dollarEURUSD | 1.135 · 1.125 | 1.148 · 1.158 | Near 1.143. A cool US CPI opens 1.148; a hot one, or a hawkish surprise, sends it back toward 1.135. |
| US 10-year yieldUS10Y | 4.65% · 4.55% | 4.85% · 4.95% | At 4.8% on strong jobs and $90 oil. A hot CPI could push it toward 4.95%; a cool one pulls it back and relieves pressure on stocks. |
Checklist
Points to check this week
Highlighted boxes are the most important. Wednesday’s CPI at 8:30 am ET (GMT−4) is the single most consequential release — the last inflation reading before the Fed decides whether to hike on September 16.