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What Happened in Markets Today

The U.S. labor market shed jobs in July, sending stocks higher. The surprise contraction renewed questions about the economy's strength amid elevated inflation. The Labor Department said the economy lost 23,000 jobs last month. Economists surveyed by The Wall Street Journal expected a gain of 83,300. In addition, May and June payroll numbers were revised downward. Traders slightly pared back their bets that the Fed will raise interest rates next month. Treasury yields initially fell but retraced most of their declines.

The manufacturing sector bucked the broader labor-market trend, adding 5,000 jobs in July. Makers of transportation and computer equipment led the uptick. Factory production has strengthened for months after years of sluggish data and jobs losses, although manufacturers still employ fewer workers than they did a year ago.

Trade Desk shares dropped 22%, and were the S&P 500's biggest mover. The advertising technology company reported second-quarter revenue that fell short of expectations.

Airbnb's stock gained 17% and was the S&P 500's biggest gainer. The short-term rental company raised its forecast for the year, citing an expansion in global demand and AI-driven improvements to its platform.

The S&P 500 rose to a record. The Nasdaq climbed 1.3%, and the Dow industrials edged 0.3% higher. Gold rose 2.3%, while crude oil fell slightly.

Markets at a Glance

One Big Story

Sahil Aggarwal's timing appeared to be perfect for launching his software company in 2021. He raised nearly $30 million from investors, and by the following year, his startup, Rattle, was valued at more than $100 million.

Then along came generative artificial intelligence that could easily automate the kind of administrative work Rattle specialized in. The company teetered on the brink.

Generative AI is steamrollering the once booming industry known as software-as-a-service, or SaaS, where customers access software over the internet, typically on a subscription basis. Now people in Silicon Valley are talking gloomily about the "SaaSpocalypse."

🎥 Heard on the Street's Quick Take

Passive investors can choose between standard and equal-weight S&P 500 index funds. WSJ's Jonathan Weil explains the pros and cons.

What's Coming Up

   -- Berkshire Hathaway reports second-quarter results Saturday morning. Watch 
      for its mountain of cash and Treasury bills, which were about $380 
      billion at the end of March. 
 
   -- Companies scheduled to report on Monday include Simon Property Group, 
      Barrick Mining, Rocket Lab, Alcon, Hims & Hers Health and USA Rare Earth. 
 
   -- Economic reports due Monday include the purchasing managers index, 
      construction spending and auto sales. 

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About Us

Markets P.M. catches you up on the day's most important markets moves, delivered after the closing bell. This email was written by Jonathan Weil, a columnist for Heard on the Street, The Wall Street Journal's home for financial analysis and commentary. To send us your feedback, reply to this email. Got a tip for us? Here's how to submit.