US stocks rebound as rate hike odds fall

U.S. stocks and crypto-linked shares rose after a series of weaker labor-market readings revived expectations that the Federal Reserve could hold interest rates steady at its September meeting, easing pressure on risk-sensitive assets. Bitcoin briefly reached $81,379, its highest level in nearly four months, while Robinhood and Strategy posted double-digit weekly gains.

The shift followed comments from Federal Reserve Governor Christopher Waller, who said keeping rates unchanged would be acceptable if inflation pressures continued to ease. Market-implied odds of a September rate increase fell to about 66%, down from higher levels following Waller’s remarks, according to the figures provided.

On Sept. 3, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all closed higher. The Dow recorded its strongest one-day advance in almost a month as longer-dated Treasury yields and the U.S. dollar declined, reducing one of the main headwinds that has weighed on growth stocks and digital assets.

Labor data pushes rate expectations lower

ADP reported that U.S. private employers added 38,000 jobs in August, below the 48,000 increase expected by economists. The weaker payroll figure came alongside softer readings in the Institute for Supply Management’s manufacturing survey and the U.S. Labor Department’s Job Openings and Labor Turnover Survey, known as JOLTS.

Taken together, the reports pointed to slower demand for labor across several parts of the economy. That does not settle the Fed’s policy decision, particularly with inflation data still ahead, but it gave markets a clearer reason to reduce expectations for another immediate increase in borrowing costs.

Lower yields tend to support assets whose valuations rely heavily on future growth, including major technology companies, Bitcoin miners, crypto platforms and firms holding large Bitcoin reserves. The response during the week reflected that relationship: crypto-linked equities outperformed several heavily watched AI-related stocks in percentage terms.

Bitcoin’s brief move above $81,000 came as the dollar weakened and equity markets recovered. The cryptocurrency did not hold that peak throughout the session, but the move placed it near levels last seen roughly four months earlier.

Robinhood and Strategy lead crypto-linked equity gains

Robinhood shares climbed 19.7% over the week, while Strategy, the software company formerly known as MicroStrategy and a major corporate Bitcoin holder, gained 14.3%. Their advances came during a period in which parts of the AI trade lost momentum despite strong earnings from some of the sector’s largest suppliers.

Robinhood’s gain coincided with elevated activity on Robinhood Chain, where tokenized real-world asset trading volume reached $390 million on Sept. 2, according to the network’s reported onchain figures. Trading between memecoins and tokenized stock pairs accounted for $217 million, while tokenized equities generated $127 million. Both were described as record daily levels for their respective categories.

The network also recorded $3.75 million in user fees over 24 hours, another reported peak. High fee revenue can indicate sustained use of an onchain venue, though a single day of trading is not enough to establish whether activity will persist. The figures nevertheless added a practical operating-data element to Robinhood’s share rally rather than leaving the move dependent solely on broader rate expectations.

The activity also illustrates how tokenized equities are beginning to compete for attention with conventional crypto trading products. Tokenization allows blockchain-based representations of financial assets to be traded and settled on a network, though the legal rights attached to a token can vary considerably by issuer and jurisdiction.

AI earnings fail to prevent a technology pullback

The week’s divergence was particularly visible in semiconductor and cybersecurity stocks. Broadcom reported fiscal third-quarter revenue of $29.59 billion, up 86% from a year earlier, and adjusted earnings per share of $3.32, ahead of the $3.24 expected by the market.

Its AI semiconductor revenue reached $16.7 billion, rising 221% year over year and 54% from the prior quarter. Broadcom forecast $21.7 billion in AI semiconductor revenue for the fourth quarter, implying 236% annual growth.

Yet Broadcom shares fell 3.1% after the results. The market focused on the company’s total fourth-quarter revenue forecast of $34.8 billion, slightly below the $35.03 billion expectation. The reaction showed the increasingly demanding standard facing companies tied to AI infrastructure: rapid growth in a key business line may not be sufficient when overall guidance falls short of already elevated forecasts.

Zscaler faced a similar response. The cybersecurity company reported fourth-quarter revenue of $898 million, up 25% from a year earlier and above the $877 million consensus estimate. Adjusted earnings per share were $1.19, exceeding the $1.09 expected, while annual recurring revenue reached $3.77 billion, also up 25%.

Net new annual recurring revenue was $246 million during the quarter. Even so, Zscaler shares declined 3% over the week and remained down 19.3% year to date. The contrast with Robinhood and Strategy suggests traders were rewarding areas with direct exposure to changing liquidity expectations and crypto-market activity while taking a more selective approach to expensive technology names.

Tesla extends its rebound ahead of inflation reports

Tesla gained 7.6% during the week and about 18% over the previous month after introducing a production version of its two-seat Cybercab in Austin. The autonomous vehicle has no steering wheel or pedals, and Tesla has set a target price below $30,000. Despite the recent rebound, Tesla shares remained down 14% for the year.

The next test for both equity and crypto markets will come from U.S. inflation data. The Producer Price Index is scheduled for Sept. 10, followed by the Consumer Price Index on Sept. 11, ahead of the Federal Open Market Committee’s Sept. 15–16 meeting.

A further cooling in inflation would reinforce the case for holding rates steady and could sustain the easing in yields that helped lift crypto-linked stocks. A stronger-than-expected reading would quickly reopen the question of whether the Fed can afford to relax its stance, placing the week’s recovery in Bitcoin, Robinhood and other rate-sensitive assets under renewed pressure.