Nonfarm payrolls surged 162,000 in August, more than triple the 53,000 consensus, sending yields higher and reversing Thursday's rally fueled by Fed Governor Christopher Waller's dovish comments. Lululemon crashed after slashing full-year guidance, FICO and TransUnion both sank after a housing regulator moved to end FICO's Mortgage scoring dominance, and the EU formally joined the US sanctions campaign against Iran.

1. JOBS: Nonfarm Payrolls Surge 162,000, Triple Estimates, Reversing Thursday's Rally as Yields Jump on Report

Nonfarm payrolls rose 162,000 in August, far exceeding a 53,000 consensus and the strongest gain since March, while Unemployment held at 4.1% as expected. Average hourly Earnings rose 0.3% to $37.75, matching forecasts, with wage growth at 3.1% year over year; labor force participation climbed to 61.6% from a five-year low of 61.4% in July. The report reversed Thursday's rally, when the Dow gained more than 600 points, its best day since August 4, after Waller said he would support holding rates steady at the September 15-16 meeting. The 10-year Yield rose 4 basis points to 4.802% Friday, while the 2-year jumped more than 7 basis points to 4.425%, its highest since January 2025. US stock futures were mixed, with Dow futures down 151 points and S&P 500 futures off 0.2%.

  • A red-hot payrolls beat and yields snapping back within 24 hours of Waller's dovish remarks shows the Fed's rate path remains genuinely contested, not settled by any single data point.
  • Risk note: with next week's Inflation data the last signal before the Fed's decision, a hot reading atop this jobs beat could push markets toward pricing a hike, unwinding Thursday's rally.

2. LULULEMON: Shares Crater 20.51% as Slashed Guidance Overshadows Tariff-Refund-Boosted EPS Beat

Lululemon Athletica (NASDAQ:LULU) shares plunged as much as 20.72% pre-market after fiscal second-quarter Revenue fell 4% to $2.4 billion, missing a $2.5 billion estimate, with comparable sales down 10% as North America declined 8%, Canada fell 11%, and China weakened. Adjusted EPS of $2.92 beat a $1.79 estimate, but the beat was driven largely by a one-time $134.5 million Tariff refund. Management slashed full-year 2026 guidance to $10.35 billion to $10.5 billion in revenue and $9.48 to $9.73 EPS, down from prior guidance of $11 billion to $11.5 billion and $13.26. Third-quarter guidance calls for revenue of $2.29 billion to $2.32 billion and EPS of $0.93 to $0.98, compared with $2.59 a year earlier. A wave of price target cuts followed, including Bernstein to $115 and Wells Fargo to $95, while investor Michael Burry, whose largest holding is Lululemon, called the stock a "trickster" and said he would buy more under $100. Shares trade near 52-week lows, down 42% year to date.

  • The nearly identical percentage decline in guided revenue across all three major markets suggests broad Demand weakness rather than a region-specific issue.
  • Risk note: with the tariff refund inflating this quarter's EPS beat and unlikely to recur, next quarter must clear a much lower bar organically, meaning the stock's reaction will hinge on underlying trends the market could not fully see this quarter.

3. FICO/TRANSUNION: Shares Sink on Housing Regulator's Push to End FICO's Mortgage Scoring Dominance

Fair Isaac (NYSE:FICO) shares fell as much as 13.76% pre-market after FHFA Director Bill Pulte directed Fannie Mae and Freddie Mac to approve lenders' use of rival scoring system VantageScore, ending what he called FICO's mortgage scoring Monopoly and accusing the company of raising per-score costs 1,800% since 2020. The directive builds on FHFA's April move accepting VantageScore 4.0 and comes alongside a Senate probe into FICO's mortgage pricing, intensifying concern its dominant position is structurally eroding despite second-quarter revenue growth of 25.7%. TransUnion (NYSE:TRU) shares fell as much as 11.7% pre-market in a sharp Reversal after rallying 3% to $84.92 Thursday, with the drop following a string of insider sales disclosed this week. Equifax (NYSE:EFX) shares also declined after Pulte separately criticized Equifax, TransUnion, and Experian on Social Media for overcharging Americans.

  • FICO's decline despite genuine revenue growth shows investors pricing a structural regulatory threat, not a near-term earnings concern.
  • Risk note: TransUnion's reversal alongside insider selling and a broader Financials sector that was little changed suggests the move reflects positioning ahead of the same regulatory pressure facing FICO.

4. IRAN: EU Formally Joins US Sanctions Campaign as South Korea Weighs Military Role in Reopening Hormuz

The European Union formally joined the US-led sanctions campaign against Iran, with Treasury Secretary Scott Bessent praising Brussels for its "early stance" on Operation Economic Outcast, targeting Iran's access to digital assets, technology, gold reserves, and shipping. Iran's Foreign Ministry spokesperson accused the EU of surrendering its sovereignty to US "economic terrorism." South Korea is weighing Options including military assistance to help reopen the Strait of Hormuz, with several media outlets reporting Seoul may send troops before year-end, though the government denied a decision has been made. CENTCOM said it has redirected 87 commercial vessels, disabled three, and boarded two to enforce its naval blockade this week. US diesel prices have risen to a record $5.85 a gallon, more than 55% above pre-war levels, while 30-year mortgage rates hit a 13-month high of 6.71%.

  • Washington pressuring both the EU and South Korea simultaneously, sanctions from Brussels and military support from Seoul, shows the administration converting diplomatic Goodwill into concrete commitments before momentum fades.
  • Risk note: South Korea's public denial despite multiple domestic media reports suggests internal deliberation is unresolved, and delay could strain the alliance as Washington escalates rhetoric toward remaining holdouts.

5. ADOBE/ZSCALER: Adobe CEO Steps Down Ahead of Critical Earnings as Zscaler Falls Despite Beat on Growth Deceleration

Adobe (NASDAQ:ADBE) shares fell as much as 4.55% pre-market after the company announced late Thursday that CEO Shantanu Narayen, who has led Adobe for 18 years, will step down effective December 1 and transition to executive chair, with Anil Chakravarthy, currently head of Adobe's Customer Experience Orchestration business, named successor. The transition comes alongside news that longtime creativity chief David Wadhwani is also departing, adding uncertainty ahead of Adobe's critical third-quarter earnings on September 10. Price target cuts followed from Citi, RBC, Barclays, and CLSA, on top of concerns about AI substitution risks to Creative Cloud that led Morgan Stanley to downgrade the stock last week.

Zscaler (NASDAQ:ZS) shares fell as much as 4.87% despite a fiscal fourth-quarter beat, with revenue of $898.2 million topping an $877 million estimate and adjusted EPS of $1.19 beating a $1.09 estimate, plus fiscal 2027 guidance above consensus. The pullback reflected concern that annual Recurring Revenue growth excluding the Red Canary Acquisition slowed to about 20%, overshadowing record AI-security bookings, up more than 50% sequentially, and a record 24% non-GAAP operating margin.

  • Adobe's Leadership transition landing with another senior creative executive's departure, one week before a pivotal earnings report, compounds uncertainty at the worst possible moment.
  • Risk note: Zscaler's selloff despite beating every headline metric shows investors now scrutinizing growth quality over reported figures, a bar that makes future beats harder to reward.

6. RARE EARTHS: USA Rare Earth and Critical Metals Rally as China Halts Some US Shipments

Rare earth stocks moved higher after a Reuters report that some Chinese firms halted shipments to the US over geopolitical concerns, with USA Rare Earth (NASDAQ:USAR) and Critical Metals (NASDAQ:CRML) both rising roughly 4% and MP Materials (NYSE:MP) and Energy Fuels (NYSEAMERICAN:UUUU) adding about 3%. USA Rare Earth's gain came the same week it completed a $2.8 billion cash-and-stock acquisition of Serra Verde Group, merging Brazilian heavy rare earth Mining with USA Rare Earth's domestic processing and magnet-making capabilities; Serra Verde targets roughly 4,000 tons per year of rare earth oxide production, expanding toward 6,400 tons annually. The stock also saw institutional accumulation from Bank of New York Mellon and Man Group, along with a fresh buy initiation from Jefferies at a $21 target. Critical Metals continued advancing its Tanbreez rare earth project in Greenland, where a board-approved $30 million acceleration program targets first ore production by late 2028 or early 2029.

  • China curtailing shipments even to firms without direct sanctions exposure suggests Beijing is using export restrictions as a broader geopolitical lever.
  • Risk note: with both companies' flagship projects still years from full production, the sector's rally is pricing in a Supply response that remains largely aspirational relative to China's current dominance.

7. MARKET CONTEXT: Stocks Head for Winning Week as Bitcoin Nears $82,000, Nvidia's Equity Stakes Hit $99 Billion

The S&P 500 was on track for a 0.5% weekly gain and the Nasdaq for 0.7%, following Thursday's rally in which the S&P climbed more than 1% and the Nasdaq advanced 1.4%. In Asia, South Korea's Kospi jumped 1.64% and Japan's Nikkei 225 added 1.26%, while Hong Kong's Hang Seng rose 1.82%. Bitcoin traded near $80,000, up 4.6% for the week after touching $82,272 overnight, its highest since May, as the Debasement trade drove flows into crypto and gold on dollar weakness. Nvidia's (NASDAQ:NVDA) equity Investment portfolio has grown more than tenfold over the past year to $99 billion, with the company committing more than $40 billion in 2026 alone across frontier AI labs, neoclouds, and photonics firms; its $5 billion Intel (NASDAQ:INTC) stake has grown to $30 billion in value and its SpaceX holding was worth $21 billion as of June. Elsewhere, Smith & Wesson (NASDAQ:SWBI) jumped 11.7% and Planet Labs (NYSE:PL) rose 13% on earnings beats, while Samsara (NYSE:IOT) surged 15% on strong guidance and Guidewire Software (NYSE:GWRE) fell 14.5% and Asana (NYSE:ASAN) dropped 9.5% on disappointing outlooks; AMC Entertainment (NYSE:AMC) rose 5.5% after its CEO criticized Robinhood's stock tokens, sending Robinhood (NASDAQ:HOOD) shares down nearly 2%.

  • Nvidia's equity stakes growing more than tenfold in a year while its hyperscale segment still represents roughly half of total sales shows the company using its Balance Sheet as aggressively as its product roadmap.
  • Risk note: the divergence between Samsara and Planet Labs' double-digit gains and Guidewire and Asana's declines on the same morning underscores how unforgiving markets remain toward soft guidance, even in a broadly positive week.