For most of the week, two stories competed for attention: strong earnings and a nervous watch on Middle East oil supply. Then, on Friday, one government report rewrote the conversation. The Labor Department said US employers cut 23,000 jobs in July, not added 80,000 as forecast, and revised the prior two months down by 103,000 more. A weaker labor market usually unnerves investors; this time it convinced traders the Federal Reserve, the US central bank whose decisions ripple through mortgages and business loans, has less reason to raise rates in September. Stocks surged, bond yields fell and the dollar slid to a seven-week low, all within hours.

Equities

Wall Street closed at a record. The S&P 500, tracking America's 500 largest companies, gained 3.58% for the week, its best since April, while the Nasdaq Composite jumped 5.19% and the Dow added 2.96%. The rally had support beyond the jobs number: earnings season was strong, with Palantir posting what one analyst called an "otherworldly" quarter, AMD beating estimates, and Disney's streaming growing faster than expected. Europe's STOXX 600 closed at its fourth straight record as earnings growth ran near 21% for the year, almost double the forecast from three months ago; Germany's DAX and France's CAC 40 advanced too. Asia was mixed: Japan's Nikkei 225 slipped on worries that artificial-intelligence stocks have run too far, Hong Kong's Hang Seng held firm, and China's Shanghai Composite added about 1%.

Rates & Credit

Bond markets moved with stocks. The 10-year US Treasury yield, the benchmark for pricing mortgages and loans, fell 7 basis points (0.07 of a percentage point) to about 4.60% on Friday, as traders cut the odds of a September rate rise from better than even to roughly 42%. Germany's 10-year Bund held near 3.13%. France's 10-year OAT stayed at 3.92%, its premium over Germany near 76 basis points, the extra yield investors demand to lend to Paris rather than Berlin, reflecting unease over its deficit and political deadlock. Credit spreads, the extra interest companies pay over government borrowing, held tight, a sign investors are not fearing a downturn.

Currencies

The dollar had its worst week in three months. The Dollar Index slid to about 99.4, a seven-week low, as investors decided US rates have less room to climb. The euro pushed above $1.15 and sterling firmed toward $1.35. The Swiss franc gained too, the dollar falling around 0.6% against it on Friday alone. The yen was the exception: even after a rare joint Japan-US intervention to support it in late July, the dollar bought around 158 yen on Friday, near the week's highs, evidence intervention only slowed its decline. Emerging-market currencies gained for a fourth straight day, led by Indonesia's rupiah, on hopes a softer Fed sends capital their way.

Commodities & Gold

Gold jumped 2.44% in a session to $4,343 an ounce, up almost 28% over the year, lifted by safe-haven buying and hopes for lower borrowing costs, which make gold, an asset paying no interest, relatively more attractive. Oil stayed elevated, Brent near $84 and WTI near $78, as the Strait of Hormuz, the waterway carrying roughly a fifth of the world's oil, remains effectively closed after months of Iranian attacks and US strikes, even as Iran and Oman pursue talks. Copper, an industrial metal that often signals factory demand, climbed toward a record $14,000 a ton.

The Week Ahead

Attention shifts from jobs to prices. The US publishes July inflation data, the Consumer Price Index and Producer Price Index, which track how fast prices for goods and businesses are rising, alongside retail sales. Britain reports second-quarter growth, several European countries release inflation and production data, and China, India and Taiwan add updates of their own. For now, investors have read a weakening jobs market as good news for the cost of money. Whether that reading survives a hot inflation surprise is the question hanging over the week ahead.