Markets remain mixed as investors digest July jobs report

Yahoo Finance Live anchors Brian Cheung and Seana Smith look at how stocks are moving in the final hour of trading this week.

Video transcript

SEANA SMITH: Happy Friday. All right, let's take a look at the market reaction. Dave, you mentioned that very strong jobs report. Brian, we're seeing actually the Dow flipping into positive territory, just slightly though. NASDAQ still off nearly 1%. The S&P was off over 1% at its lows of the day. Now we're seeing losses of just about a half of a percent. Taking a look at the sector action in response to that jobs report this morning, a bit of a mixed picture. Energy, financials leading the way, materials among them. Consumer discretionary communications among the biggest laggards.

Bank stocks here popping on the thought and the hope, I think, for a more aggressive rate path from the Fed. You see JPMorgan and Wells Fargo among the leaders today. But, Brian, let's take a look at the bond market because we're getting a bit of a mixed response here in equities. But the movement in the 10-year is what we want to note today because the 10-year up right around 2.84%.

BRIAN CHEUNG: Yeah, it's been teetering. I mean, the overall equity markets really spilled in the pre-market before 9:30 actually kicked in. But actually, the bigger movement has been in the bond market, as you point out. Up 16 basis points just today on the US 10-year. We don't have it on here, but the US two-year actually rising 21 basis points to 3.25%.

People are going to say, wait a minute, that's a lot higher than 2.84%. That shows a deepening, what they call, yield curve inversion. That typically precedes a recession. Doesn't flag that we're in one right now. But that wider gap does show challenges for the Federal Reserve in saying, hey, we're not so sure that your rate hikes are going to help us avoid a soft landing here.

But I do want to show you, this is a reversal of a one-month trend, if we can just kind of take a look at what we've been seeing over the past 30 days. The trend was going down on yields. And for a Federal Reserve that was raising rates, the question is, isn't that actually counterintuitive to what they're trying to do here? The reversal now today. We'll see if that trend extends into next week. Again, light trading typically in the month of August. But again, we've seen a reversal of this. Maybe we're headed to even 3% on the 10-year.

SEANA SMITH: Yeah, certainly something to keep.