On the first Friday of each month, important data comes out pertaining to the U.S. jobs market. And a lot of traders, especially new ones, get confused about the effects they have on stock market action. Let me – and Ferris Bueller – make sense of it all!
Jobs Data and the Stock Market
Let’s say the monthly jobs data shows that the U.S. economy is gaining jobs (more people are employed than they were the prior month). That’s generally considered strong data. And you would imagine that broad stock market securities like the E-mini S&P 500 futures would trade higher on it.
However, you’ve got to remember the “F” word that’s always floating around in traders’ heads:
“Fed.”
The Federal Open Market Committee, or Fed for short, has a major influence on where interest rates go. That’s how it’s been for decades, and I don’t think it’s going to change to the free market solely dictating rates anytime soon.
So let’s flip the switch.
On a day like today August 7th 2026 when the jobs numbers come out a little weak, you might think, “Oh, this is maybe showing a slight slowing of the economy. That’s not great, stocks should trade lower.
But if you were watching the ES or NQ futures charts at the time, they traded higher on the news.
You might scratch your head wondering: Why would index futures trade higher on weak jobs data?
Traders and the Fed
In the classic movie Ferris Bueller’s Day Off, teenager Ferris breaks the fourth wall and advises the viewer – you want to be sick enough to get out of going to school, but not so sick your parents take you to the hospital.
And that is exactly how market participants seem to behave when it comes to data and the Fed.
Think of traders as a collective as “Ferris”.
With the current Fed and rate environment, news of job losses is just enough of weak data that the Fed may be less inclined to hike interest rates soon.
If interest rates stay where they are rather than moving higher, that can help fuel economic activity, home buying, business investment and so many other things.
So that’s why traders can react “positively” (push index futures higher) even on weak economic data.
It’s like a kid with a cough and light fever getting out of going to school, but not being sent to the doctor.
No market participants want to see really awful economic data or a market crash. But so long as the data is mixed and not showing as super strong, it may provide time before the Fed starts hiking rates which is what gets stocks trading higher at least short term.
It may seem crazy, but this pattern appears a lot. So the next time economic data and market reactions seem misaligned, remember Ferris!
👉 PS — Trader Trainings Coming Up!
The Trader Training calendar has been updated! Here’s what’s on deck:
- Ticker Request Live — free weekly trading show
📅 Tuesday, August 11th at 4:30 PM ET - First 40 Office Hours → for First 40 Trading Club members
📅 Wednesday August 12th at 4:30 PM ET - Bonus Advanced Momentum Tuneup → for Advanced RSI Power Zones members
📅 Thursday August 13th at 4:30 PM ET
Visit himareddy.com/events for full details and registration.
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