On Friday, the U.S. Department of Labor released the August nonfarm payrolls report, which came in strong, with job gains far exceeding expectations and the unemployment rate also falling to a low level. After the data was released, the bond market reacted first, with yields rising rapidly, while the stock market came under pressure and fell.

Strong employment data usually means the economy’s fundamentals are healthy, corporate profit expectations are improving, and it should be positive for the stock market. But this time the market reaction was the opposite. The key is that “good data” may trigger “bad consequences” — namely, the Federal Reserve may delay rate cuts or even resume rate hikes. Rising bond yields increase companies’ financing costs and reduce the attractiveness of stocks and other risky assets, especially high-valuation growth stocks.

From market data, the Nasdaq 100 index fell 1.16% after the data was released, to 29,482.32 points, reflecting investors' concerns about interest-rate-sensitive tech stocks. At the same time, U.S. Treasury yields jumped, further weighing on equity valuations.

However, the market is not monolithic. If subsequent data shows the economy is overheating and the Federal Reserve is forced to tighten policy, stocks may face greater pressure; conversely, if economic data weakens and expectations for rate cuts rise again, the stock market could rebound. Therefore, investors should closely watch next week's inflation data and speeches by Federal Reserve officials.

Risk warning: This article is for informational interpretation only and does not constitute investment advice.