Payrolls Tripled the Forecast. The S&P Gained Nine Basis Points

Crude rose almost 10% as the Hormuz blockade settled into something the market now treats as permanent, and August hiring came in at 162,000 against a forecast of 56,000. Utilities was the third strongest American sector and one of six the even-weight strategy owns.

Brad Roth
September 06, 2026

TL;DR

• August payrolls came in at 162,000 against a 56,000 forecast, and July was revised to a gain of 21,000 from a reported decline of 23,000. Unemployment held at 4.1% and hourly earnings ran 3.1% higher on the year.

• WTI settled at $91.48 and Brent at $96.28, up 9.7% and 9.3% on the week, after American and Iranian forces exchanged fire around the Strait of Hormuz the prior weekend. Energy led all eleven American sectors.

• Odds of a Federal Reserve increase on September 16 finished at 58.4%, against 50.4% the day before the jobs report. The S&P 500 gained 0.09% across the five sessions.

Week in Review

Weekly closes, Friday 9/4/26

• The S&P 500 closed at 7,718.60, up 0.09% on the week.

• The Nasdaq Composite finished at 26,506.99, up 0.40%.

• The Dow ended at 53,414.25, down 0.27%.

• The Russell 2000 closed at 2,975.65, up 0.11%.

• The VIX ended at 14.53 against 14.43 a week ago.

The repricing happened at the front of the curve. The two-year note closed at 4.379% against 4.234% a week earlier, while the ten-year moved to 4.784% from 4.722% and the thirty-year to 5.246%. That narrowed the gap between the two-year and the ten-year to 40 basis points from 49. WTI settled at $91.48 and Brent at $96.28. Gold ended at $4,476.60 an ounce, down 1.2%, and silver at $66.75. The dollar index closed at 99.18.

The week opened on a war. American forces struck Iranian launchers on Larak Island over the weekend, Iran said it hit a tanker in the Strait of Hormuz, and Brent was up almost 6% before Monday's American open. Crude never gave it back, adding another 5.2% on Tuesday alone. Then the labor data arrived in the wrong order. Private hiring came in at 38,000 Wednesday against a consensus near 47,000, and Challenger put August layoff announcements at 52,881, some 58% above July. Long yields fell Thursday and the S&P gained 1.06%, its best session of the week. Friday reversed the premise entirely. Payrolls landed at roughly three times the forecast, July's decline was revised into a gain, and equities closed lower while the two-year rose four basis points. Four of the eleven American sectors finished the week higher.

Allocation Changes

Both published strategies ended the week owning exactly what they owned going into it.

The index strategy runs the S&P 500 at 50.2% and the Dow at 48.9%, with 1.0% in T-bills. The even-weight sector strategy holds the same six real-economy sectors, spread across a 129 basis point range: healthcare at 16.7%, financials at 16.5%, materials at 16.3%, industrials at 15.7%, real estate at 15.6% and utilities at 15.4%, with 4.1% in cash. Nothing moved more than two-tenths of a point, and the only change in order was financials passing materials into second. Three of those six ranked in the top five of the eleven American sectors this week. That is what even sizing is built to produce when the spread between the best sector and the worst is only four points.

The actively managed strategy did move, and it moved toward the week's dominant input. A direct energy position nearly doubled to 13.6%, with a large integrated oil producer entering beside it at 3.6%. A gold income strategy came in at 11.2%. The broad commodity fund was cut to 4.8% from 15.8% and the interest-rate hedge to 4.4% from 9.2%, while the long dollar position was trimmed to 14.5% from 18.7%. The strategy now carries 21 positions against 26 a week ago.

The Bigger Picture

Six months into the war between the United States and Iran, the oil market has stopped treating the Strait of Hormuz as an event and started treating it as the baseline. Traffic through the strait ran near 18 million barrels a day before the war. It was roughly 4.8 million in July and closer to 2 million through August. The interim ceasefire agreed in June has collapsed, the negotiating window has expired, and neither side is offering terms. That is the difference between a spike and a repricing. A spike assumes the barrels come back.

Energy led all eleven American sectors at 2.2% and is not one of the six the even-weight strategy owns. The reason is in the price path rather than the direction. Crude was $92.92 before Wednesday's open, $91.30 at Wednesday's close, $90.64 Thursday morning and $91.48 Friday afternoon. A sector whose earnings are set by a number that round-trips two dollars in three sessions on a headline has not built the kind of trend the system requires. The cost of that rule is a week like this one. The purpose of it is the week they do.

The jobs number did its work entirely at the front of the curve. Payrolls at 162,000 against a 56,000 forecast, with July revised from a 23,000 decline into a 21,000 gain, took the two-year up 14 basis points on the week against six for the ten-year. September increase odds closed at 58.4% against 50.4% the day before. Financials is 16.5% of the even-weight strategy and finished the week flat, because the gap between short and long rates is what lending earns on, and that gap narrowed from 49 basis points to 40. Strong employment improves credit quality and compresses the shape of the curve at the same time. The sector split the difference.

The more interesting result was on the other side. Utilities rose 0.82% and was the third strongest American sector in a week when the two-year gained 14 basis points, which is not the textbook response from a position valued off the discount rate. Healthcare, the largest position at 16.7%, was fourth. Both sell into demand set by schedules rather than by the growth cycle, and neither was asked to defend a multiple this week. Materials and industrials gave back 1.4% and 1.1% as the growth read cooled. Three central banks are now tightening into the same energy shock. The ECB decides Thursday in Berlin, the Federal Reserve on the sixteenth, and the Bank of Japan on the seventeenth and eighteenth, where a Reuters poll now expects the policy rate to reach 1.25%. Inflation is arriving through a supply channel none of them controls, and all three are answering with the one instrument they have. August consumer prices land Friday, and that release decides the September question.

THOR Risk Gauge

Constructive. Both published strategies closed the week near fully invested, at 99% and 96%, and volatility at 14.53 sits about a point above its 52-week low. The spread between the best and worst American sector was four points, so there was no rotation to end up on the wrong side of. The caution is the channel the pressure is coming through, with energy supply set by a blockade rather than by demand, and three central banks raising rates into it.

Signal Watch

THOR Index Rotation — As of 9/4/26

The two American averages take roughly half each, with a point in bills. They finished the week 36 basis points apart, the broad measure higher and the thirty-name average lower, which is the case for owning both rather than choosing between them.

THOR Low Volatility — As of 9/4/26

Six sectors sized close to evenly, three that answer to the growth cycle and three valued off the long end. This week rewarded the second group and taxed the first, which is the trade-off a six-way split is designed to absorb. The four at zero have not confirmed a trend the system owns.

THOR AdaptiveRisk Dynamic — As of 9/4/26

The actively managed strategy runs 59.3% in equities, 15.9% in commodities, 14.5% in specialty currency exposure, 5.7% in alternatives and 4.4% in rate hedging. Energy is now the structural line, with a sector position and a single producer together accounting for roughly 17% of the strategy and a gold income position entering at 11.2% as the broad commodity fund was reduced. The top of the strategy remains a macro expression rather than an equity one.

Weekend Reading

Behind the Ticker — Getting 5% Yield With Half the Volatility, with Jeff Klingelhofer of Aristotle Pacific. Klingelhofer spent his early career at Pimco before more than a decade at Thornburg, where he became Head of Investments, and returned to Newport Beach in 2024 to join Aristotle Pacific. He walks through the relative value philosophy behind the firm's first three ETFs, launched in July.

Strong August jobs report sends yields higher (Reuters). The clean read on Friday morning, including the revision to July that mattered as much as the headline count. Useful for the strategist reactions collected in one place.

Oil market starts pricing in a prolonged Hormuz crisis (Reuters). Ron Bousso on why the market has moved from treating the strait as a disruption to treating it as a new supply reality. This is the argument underneath the week's largest move.

BOJ to speed up its tightening campaign, raise key rate to 1.25% in September (Reuters). A majority of economists in a Reuters poll now expect Japan to move faster and finish higher, driven by war-related inflation and continued pressure on the yen. The third leg of the tightening story.

Quote of the Week

"You can't predict. You can prepare."

— Howard Marks, Oaktree Capital Management, memo to clients, November 20, 2001

The desk behind this letter runs deeper. THOR Signals gives advisers a systematic read on any ticker, short, medium, and long term, with the exact level where each read changes, plus a daily research note and white-label reports for client meetings. Start at thorsignals.com

Brad Roth / CIO, THOR Financial Technologies

This content reflects the opinions, analyses, and research of THOR Financial Technologies as of the date published. It is provided for informational and educational purposes only and does not constitute investment advice and should not be relied upon as the basis for any investment decision. Past performance doesn't guarantee future results, and all investments involve risk. For more information, please go to: thorft.com